Holiday get-togethers with family and friends have been drastically scaled down or canceled during the last two years in accordance with COVID-19 regulations that restrict the number of individuals who may congregate in one place. However, with the limits removed, normality has returned, and despite the high inflation rate, Canadians are ready and eager to rejoice.
Undoubtedly, Canadians will pay more during the Christmas season of 2022 due to inflation. According to Statistics Canada, the cost of food increased by 9.9% in July when compared to the previous month.
However, we think that tradition and passion could triumph over practical considerations. Our hunch is that most individuals will figure out a way to make it work since this is such a beautiful moment and they have been waiting so long for it. Although tough, inflation is more of an annoyance than a problem for the majority of Canadians.
Why is Inflation So High Right Now?
The inflation rate is greater towards the end of 2022 than it has been in more than ten years making people sometimes think about taking a payday loan Quebec to keep in the same financial position. The consumer price index (CPI) must first be understood in order to comprehend why. Statistics Canada produces a list of retail prices for a variety of products and services each month.
However, the CPI measures inflation on an annual basis rather than a month-to-month one. This implies that price increases from this month a year ago are reflected in the current inflation rate. Many areas of Canada were under lockdown at the beginning of 2021. Since many items in the CPI basket had lower than typical costs during the lockdown, greater inflation rates were to be expected when these prices began to rise again.
However, consumer behavior changed as a result of the epidemic, inflation, and consequent price increases. The demand for services decreased, particularly for goods and services like dining, live entertainment, and travel. Consumers spent more on products since they weren’t spending money on these items.
In the second part of 2021, business restrictions were subsequently eliminated throughout Canada, and the economy resumed. As a result, demand in Canada and many other nations recovered quickly. In addition, greater inflation has persisted longer than expected due to global supply restrictions brought on by the pandemic’s unique features, namely the rapid pace of closing.
Savings made by Canadians in 2020 and 2021 are now being spent more, and demand is growing throughout the economy as more individuals gradually resume employment, vacation, and leisure activities. Prices and inflation are influenced by consumer behavior.
How Can I Be Affected by Inflation?
The COVID-19 epidemic has brought attention to the effects of inflation. The costs of today look astronomically high after the majority of products and services had a sharp decline in price in early 2020. This viewpoint is partially justified.
The current inflation rate, 5.1%, is the highest since 2003, according to the most recent figures. But it isn’t that unusual; it only looks out of the ordinary when we contrast today’s pricing with the unusually low costs we encountered during the start of the epidemic.
What is Causing the Present Increase in Inflation Rates?
In any case, Canadians are returning to some kind of “regular” life after more than a year of stay-at-home orders and other limitations, and they want to purchase goods. Some Canadians were able to save money since the majority of people spent much of their time inside with little to no opportunities to travel, attend concerts, or eat out. People are now prepared to spend that cash. Manufacturing companies and merchants are finding it difficult to keep up with the increasing demand as a result.
How to Deal with Inflation During the Christmas Period?
Despite positive forecasts, two-thirds of Canadians may struggle over the Christmas and winter holidays due to high inflation and rising prices.
The following tips will assist you in handling it.
Establish a Budget and Create a List
For all of your expenses, including your Christmas shopping, you should establish a budget. Budgets provide restrictions on spending, which is always a good thing. Follow your spending plan.
Setting a budget and creating a shopping list should go hand in hand. List the names of the relatives and friends for whom you’ll be purchasing presents, along with your budget.
Use a Cash
Paying everything using cash or a debit card is one approach to keeping under your spending limit. Hopefully, after putting money aside all year, you have reached your savings target. Now for the enjoyable part: holiday shopping. Keep in mind that when the money is gone, so is your shopping.
Therefore, be careful to plan everything out well. You might also buy all year long to escape the hectic holiday season and its associated stress.
Watch for deals and request price matching. Have your shopping list handy, and when you find something you like, check the item off the list. Keep receipts and be familiar with the return policy.
Create a strategy to pay off the balance within 30 to 60 days if you must use your credit card. Your Christmas expenditures can cost you more in interest and fees if you wait longer to pay off your credit card debt.
Reusing products has become increasingly commonplace, in part due to the benefits to the environment and the popularity of internet markets like eBay, which make it simpler for customers to acquire outstanding used presents.
People’s opinions about donating old goods are changing, particularly when doing so allows them to purchase a product or brand that would otherwise be out of their price range or when they are searching for a rare collectible that benefits from eBay’s extensive network.
Never purchase the first item you like at a shop. Sometimes a neighboring shop has the same item for less money. This advice is generally applicable to all holiday and winter purchasing. You might attempt to find cheaper meals, presents, plane tickets, etc. with this method. You need to take your time with this to save money. For kids, these days, don’t purchase in-game items for fun. For example, kids might spend a lot of money for buying Minecraft game for PC or mobile. Instead of buying try to download Minecraft PE for free.
Inflation won’t ruin your holiday if you know how to deal with it. If you have a permanent job or part-time job, you can still arrange a holiday for yourself and your family if you follow the basic rules of saving and financial planning.