June 20: Here are some top tips on beating inflation

June 20, 2024

For many of us, inflation is an unwelcome guest from a long time ago who has made a sudden reappearance. For the younger among us, it’s a weird new thing.

How do we cope with a reality that has prices for things like groceries soaring? Save with SPP took a look around for some top tips on slaying the beast of inflation.

The folks at Ratehub.ca describe “two common categories of inflation” as being “cost-push inflation” and “demand-pull” inflation.

Cost-push inflation, the blog reports, “happens when production costs rise (wages, raw materials, transportation, etc.) but demand doesn’t.” The higher cost of producing items inflates their cost, the blog explains.

Demand-pull inflation, Ratehub explains, “is the result of higher consumer demand for certain goods.” Popular items become harder to find, supplies shrink, and companies “start charging more.”

Terrific. But what can we do about it?

Among the tips offered up by Ratehub are:

  • Putting off big expenses – if you can, Ratehub suggests, put off costly home renos or big-ticket purchases like new cars.
  • Save on groceries – buy in bulk, the blog suggests; take advantage of grocery store points programs, and plan more vegetarian meals given the high price of meat
  • Pay off debt – “Brainstorm some ways in which you can free up money… by cutting back, then use the extra cash you saved to begin paying off your debt.”

Global News suggests a few more ideas:

  • Spend less on dining out, entertainment – A recent poll, the broadcaster reports, found that 54 per cent of those polled (in 2022) were “dining out less.” As well, Global notes, 46 per cent said they were “cutting back on entertainment spending.”
  • “Spring clean” your budget – Myron Genyk of Evermore Capital tells Global News that people should be “taking a look at credit card statements (for) recurring charges that might not be worth the monthly fee, such as a streaming subscription that is not being watched.” Cutting these “passive” charges may be easier than “overhauling one’s lifestyle” to make spending cuts, she tells Global.
  • Consider the impact of higher interest rates on savings, expenses – Interest rates, reports Global, haven’t been this high for a generation. For savers, now may be a good time to consider a Guaranteed Investment Certificate (GIC), but the article warns that even GICs may not keep pace with inflation if it continues to increase. For those with mortgages, Genyk suggests they consider a longer amortization period. “While they might end up owing more on their mortgage by extending the life of the loan, it might be worth it to offset the temporary inflationary pressures on their monthly budget,” the article suggests.

Forbes Advisor has some additional thoughts on the subject.

  • Speed up debt repayment – With interest rates on debt rising, a bad thing is getting worse, Forbes reports. The article quotes Doug Hoyes of Hoyes Michalos as saying “if you are spending more money on food, rent, and gas for your car, that leaves less money to service your debt.” His first tip for surviving inflation is “to tack consumer debt as quickly as possible to avoid the snowball effect of debt overwhelming your finances.”
  • Use cash-back credit cards – Vanessa Bowen of Mint Worthy tells Forbes that using a cash-back credit card “on essential expenses like gas and groceries can be a simple way to put money back in your pocket.”
  • Avoid volatile investments – When investing, watch out for companies carrying a lot of debt. Nesbitt Burns’ John Sacke tells Forbes “you want to buy stocks in companies that are likely—and I use that word ‘likely’ very carefully—to perform better than other companies in a rising rate environment.”

The folks at Sun Life Financial finish us off with some classic inflation-beating advice.

  • Cook at home – “Cooking at home is cost effective,” especially when compared to the cost of dining out or ordering in, the article advises. Think of the $6 latte you like – on a daily basis, it is costing you $2,190 per year! Much cheaper, the article notes, to make your own coffee at home.
  • Buy used, or borrow – “Consider buying second-hand items – you can sometimes find great deals at a fraction of the original price. Books, toys, sports equipment, furniture, clothing and accessories … you can find it all on platforms like Facebook Marketplace and Kijiji,” the article suggests. You may also be able to borrow or rent things like speciality tools for a home improvement job, rather than laying out money to own them, the article suggests.
  • Travel during off-peak times – The article suggests being “smart” about travel, and to “take advantage of the off-season. You’ll likely have a cheaper and more relaxed holiday.”

Some of our friends have started doing challenges related to health and weight loss; maybe some of these ideas would make good challenges – going a week, or a month, without dining out or ordering in would save a pile of cash, for example. Creativity is always good when it comes to saving money, we wish you the best of luck in your own challenges.

When you are able to generate some extra savings, don’t forget about the future. If you are saving on your own for retirement, a wonderful and willing partner is out there for you – the Saskatchewan Pension Plan. SPP members have their savings pooled in a low-fee, professionally managed fund. Those savings grow over time, and when it’s time to collect, SPP members have choices, such as a lifetime monthly annuity payment or the flexibility of our Variable Benefit. Check out SPP today!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.

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