June 14, 2021
Since the first few months of 2021, Canada’s inflation rate has been on the rise.
Whether you think that signals a big growing problem or a momentary blip, we’ll leave that discussion for another day. Here’s how to shore yourself up financially just in case inflation does go off the rails.
Financial planner Janet Gray said her advice for this scenario is really the advice she’d give anyone looking to fortify their financial fortress in case of strong winds.
When it comes to your investments, invest whenever possible in products guaranteed to make you more than the inflation rate — but also make sure to diversify, to mitigate risk.
If you’re getting a mortgage or refinancing one, don’t be tempted by low variable rates — stick with the reasonably low fixed rates to lock them in for years to come, advised Gray.
It’s also always a good idea to aggressively pay down high-interest debt whenever you’re in good financial standing, she added. That way, if the inflation rate hits the fan, you’ll have more room credit-wise to take unexpected blows.
“Pay it down in good times, and then it’s available for you if you need it in bad times.”