How to protect your finances given today’s inflation levels

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Oaken Financial

June 30, 2023

Saving strategies

Inflation may be on the decline from a year ago when it was over 8%, but that doesn’t mean it’s at an acceptable level yet. The most recent Consumer Price Index (CPI) is 4.4% higher than the previous year and it’s still too high for the Bank of Canada’s (BoC) liking. The BoC generally likes to see the CPI within the range of 1% to 3%.

Persistently high inflation is a core reason why the BoC raised its benchmark policy rate on June 7, 2023, to 4.75%, levels we haven’t seen in more than two decades.

“Globally, consumer price inflation is coming down, largely reflecting lower energy prices compared to a year ago, but underlying inflation remains stubbornly high,” said the BoC in its press release announcing the most recent rate hike. “While economic growth around the world is softening in the face of higher interest rates, major central banks are signalling that interest rates may have to rise further to restore price stability.”

What’s this all mean to the everyday Canadian? Basically, we’re all feeling the pinch and by raising interest rates it’s hoped that prices will even out, eventually. Until then, here are a few ways to protect your finances given today’s reality.

Maximize the interest your savings are earning.

Higher interest rates are a double-edged sword. If you’re looking to borrow money - from mortgages and loans to lines of credit - you’ll spend more to do so. However, if you’ve got savings, you could earn more in interest. Whether it’s in a high-interest savings account or GIC, it should be easier for your money to make money.

Track your spending.

Glean useful information about how much you are spending and on what by tracking where your money goes each month. It’s truly one of the best ways to identify your household’s wants and needs to discover where opportunities to save can be found.

Review your debt.

Virtually everyone has some form of debt, whether it’s a mortgage, car loan, credit card or line of credit. But not all debt is created equal. Some debt costs more to have than others, while some are easier to pay off because the amount owed is smaller. Make a list of all the debt you have with what’s owed and the interest rate, and then decide on how best to tackle it.

Protect your credit score.

Your credit score may be used for a variety of purposes, from borrowing money to being considered for rental housing. It’s important to protect and safeguard your credit score by:

  • Making at least the minimum payment on your credit cards or lines of credit by the due date every month, and paying more than the minimum when possible;
  • Not skipping payments on your other bills, like cellphone, Internet and utilities; and
  • Not maxing out your credit cards. Even if you are making your payments, having too much debt can negatively impact your score.

Consider using reward points.

It seems everyone offers a loyalty program. If you’re collecting points but never using them, it’s a good time to see what you’ve earned and what you can use your points towards. From gas and groceries to entertainment, redeeming reward points could help lower your costs occasionally on stuff you’d buy anyway.

Drive with fuel efficiency in mind.

Remember the good ol’ days two to three years ago when gas hovered around $1.10 per litre? This year, the average price in Canada is consistently over $1.50! Fuel-efficient driving techniques (like gently accelerating, maintaining a steady speed, avoiding high speeds, and coasting to decelerate) can save hundreds of dollars each year.

Minimize food waste.

The increased cost of groceries still outpaces inflation considerably. Currently, groceries are 9.1% higher this year than last. Yet, it’s said that every Canadian household throws out about 140 kilograms of food each year. That’s a whole lot of money getting thrown out with the trash. Get the most out of the food you buy and minimize food waste.

Shop around when your insurance is due.

When your insurance policies come up for renewal - whether it’s your home or auto insurance - put your insurer’s premiums and coverage to the test. Shop around. Insurance premiums are not the same across insurers (often for the same coverage even) and prices frequently change.

Protect your finances with industry-leading interest rates

There’s no doubt about it, inflation is stretching everyone’s dollar thin which is why it’s important to make the most of your savings. At Oaken Financial our interest rates are some of the best in the industry. It’s how we can help you make the most of your hard-saved money. Learn more about what makes Oaken Financial the better choice by visiting