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Navigating your financial wellness through turbulent times

Couple sitting on a couch using a laptop and reviewing bills.

Everything seems to cost more these days. At the gas pumps and grocery stores, New Brunswickers are seeing higher prices, largely due to inflation. 

What is inflation?

Inflation relates to how the value of your money changes over a period of time. What your money can buy today compared to a period of time in the past is the measurement of inflation.  

Statistics Canada uses the consumer price index to determine Canada’s inflation rate. To do this, they measure the price of a wide range of goods and services and track the changes in their costs each month. The amount of change in the consumer price index in percentage measures the rise or fall of inflation. 

Over the last 30 years, the Bank of Canada has aimed to keep prices in check and inflation within a range of one to three per cent. However, inflation is now at its highest since the 1990s and is expected to remain high though the rest of the year. When inflation is high, money doesn’t go as far, affecting everyone.

To rein in inflation and encourage saving, the Bank of Canada has been raising interest rates.  Rising interest rates have increased the cost of borrowing for things like mortgages and lines of credits.  For New Brunswickers with a variable rate mortgage, or a mortgage that is up for renewal, this will likely mean higher payments each month.

Although you may feel at a loss when it comes to rising prices, here are some steps you can take to better manage your financial wellness during these turbulent times.

Call your creditors

If you’re having trouble making your payments or expect challenges in keeping up with your regular payments, contact your creditors there may be options to consolidate, refinance or adjust your payment schedules to make them more manageable.  Also consider revisiting your personal budget to see where you can make adjustments.

Your financial institution may also be able to help if you’re facing short-term financial problems. Many banks and credit unions provide resources and advice to help their clients through tough times. Visit your financial institution’s website to review your options. 

Learn more about managing your credit.

If you owe money to a company and are not paying or are unable to make the minimum payments, the company may seek the assistance of a collection agency. When this happens, a creditor has the right to collect on a debt that is owed to them, and the consumer has the right to be treated reasonably and with respect. Visit the Collection Agencies page to understand your rights and what a collection agency is allowed and not allowed to do.

What is a licensed insolvency trustee?

Review your expenses

For many, building a budget and tracking spending can be a challenge in the best of times. During turbulent times, the challenge becomes even harder. But given increasing costs, it may be a good time to look at your day-to-day spending. 

Look at your monthly expenses to see where you can reduce costs. Having a budget to track your income (money coming in) versus your expenses (money going out) can help. Learn more about budgeting and find our budget worksheet here.

While you can’t necessarily stop buying household items, you can cut costs in other ways. Consider shopping in bulk. Buying in bulk is often less expensive than buying individual products. You could even split the purchase with a friend. 

Plan your meals ahead. Creating a grocery list often means you don’t buy unnecessary items when at the grocery store. 

Consider putting aside money now to create an emergency fund in case of an unexpected medical issue, a home repair emergency, or an untimely car repair. Some experts suggest putting aside the equivalent of three to six months of your regular expenses. Learn more about saving money.

Avoid more debt

Try to avoid borrowing additional money during this uncertain time. Don’t resort to overusing your credit cards or signing up for additional lines of credit. If you must borrow to make ends meet, make sure you understand the financial implications of your decision, especially with increasingly higher interest rates. 

Before taking out a payday loan, consider alternatives. Payday loans are short-term loans for a relatively small amount of money at a very high interest rate. They’re an extremely expensive way to borrow money. Taking out a payday loan when you are in a financially difficult situation increases your risk of not being in a position to pay it back and falling into a debt trap. 

Learn more about payday loans and alternatives.

Be aware that using the services of an online payday loan company that isn’t licensed to operate in New Brunswick puts you at a greater risk for harm. Using licensed lenders provides you with some added legal protections from predatory lending practices. Some of these protections are interest rate caps, disclosure requirements and cancellation options. 

Learn about the risks of using unlicensed online payday lenders

Avoid online lenders targeting New Brunswickers to offer them fraudulent loans. While many online lending options may be legitimate, there is also a rise of scam artists offering fake loans to unsuspecting consumers.

How to recognize a loan scam

Seek help

Getting advice from a financial professional may be a good idea. Professionals offer a broad range of products and services. Before deciding who to work with, be sure they are qualified to provide you with the services and products you need. 

See what you should know before working with a financial professional.

Many employers are increasingly offering financial wellness programs to their benefits. Make sure to check out your company’s offerings to see if these are available to you.

Before enlisting a debt settlement company to negotiate with your creditors, understand both your consumer rights and the impact any negotiation or settlement could have on your credit score. Consider other ways you could pay off your debts, such as negotiating a repayment plan with your creditors on your own.

What to consider before you sign a contract with a debt settlement agency.

Don’t act on emotions when it comes to your investments

High inflation not only impacts your day-to-day purchases, it also impacts your investments. Generally, the money you have saved in low-interest bank accounts or any cash you’ve stashed in a cookie jar will be worth less because it can’t buy as much as it used to given rising costs. 

When inflation rises and the relative value of any savings falls, it’s natural to feel concerned about your investments and retirement. But it’s important to keep your emotions in check and not rush to make any sudden money decisions. Emotional situations can lead to poor financial decisions. It’s always important to make investment decisions according to your risk profile, time horizon and financial circumstances. Talk with a registered securities industry professional before making any changes to your portfolio. 

If you decide to work with a securities industry professional, choosing the right one may be one of the most important financial decisions you make. Generally, anyone in the business of trading in securities or derivatives, offering investment advice or acting as an investment fund manager in New Brunswick must be registered with FCNB. Checking an individual’s or firm’s registration category or licensing status helps protect investors. 

Be aware of scams

Always protect yourself from financial fraud. As with any major event, fraudsters and scammers find ways to exploit situations. Monitor for the red flags of fraud, which remain consistent regardless of the fraud or scam. Ask questions and think seriously before making financial or purchasing decisions. Sign up for our fraud alerts to learn of current scams targeting New Brunswickers.

You’re not alone

If you are feeling anxious about your finances, know that you’re not alone. While rising inflation can be scary and unfamiliar, you can take steps to reduce your financial stress. Talking with others about your money situation can also help.