‘Tough moment’: Canadians are struggling financially despite interest rate cuts – National

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While Canadians enter the summer season hoping to enjoy a barbecue or a trip to the beach, almost half are hesitant to do anything at all because their household finances are worse than they expected.

A new study from TransUnion Canada The report released Tuesday shows that 46 per cent of Canadians’ household finances are worse than planned at this point in 2024, and 58 per cent say they are not optimistic about what will happen financially over the next 12 months.

Personal finance expert Rubina Ahmed-Haq said this is not a surprise given the cost of living and inflation. He noted that while the latter have cooled and the Bank of Canada has cut key interest rates, this is not enough to provide real relief for many.

“It didn’t make a big dent,” said Ahmed-Haq, host For what it’s worth on the Corus Entertainment radio network, Global News told us. “In many cases it means maybe $50 or $60 in your pocket every month if you have a very large mortgage, so that’s not really life-changing money.”

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With about 57 percent of Canadian households saying their income isn’t keeping up with the current rate of inflation, that means many feel that even with a cooling in those numbers, people are still paying higher prices than they were three or four years ago.

Click to play video: 'Money saving advice for students this summer'

Savings advice for students this summer

“This is only in our recent memory that we remember what the price of a carton of eggs was or of beef,” Ahmed-Haq said. “It’s not like, ‘Oh, things used to cost so much in the 1980s,’ but the feeling that things were cheaper.”

“This is just a moment in time, and we happen to be in a pretty tough financial moment.”

Inflation is one of the top three household financial concerns for nearly nine in 10 Canadians over the next six months, and some are having to make decisions about what to buy and what to save.

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“I think most of us feel like our finances can always be better,” Bobby Uma, a Canadian motivational speaker, told Global News.

Uma says that although he and his family feel like they are doing well financially, he feels like he will still be weighing the options and that is where communication with his partner and children comes into play.

“Sometimes we say, ‘Hey, we want to go to that show’… and other times we say, ‘You know what, do we really have to buy all these clothes? Do we really need to invest in this?” he said. “I think it helps that we have conversations with each other, which is very important.”

He added that his paychecks can be more sporadic and that there were a lot more concerns during the COVID-19 pandemic because things like speaking engagements weren’t as feasible, but he noted that this made him more conscious of his finances and that’s why he plans will make. make different decisions and explore how this would affect their future finances.

Making these decisions can be critical, personal finance expert Barry Choi told Global News, because depending on where you are personally and financially, you may need to make some changes to things like your emergency fund, retirement, or discretionary spending. For example, the TransUnion survey shows that 52 percent of Canadian consumers plan to cut back on their discretionary spending, while some are looking at changing their savings habits.

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For some, that could even mean a career change.

“The next thing to consider is applying for jobs that will make you more money, because let’s be realistic: your employer isn’t going to just give you a raise,” Choi said. “So your best bet is to look for another job or even worst case scenario, pick up a part-time job, get some extra hours… just temporarily, until things settle down a bit.”

Finding a new job may not always be feasible, so Choi said people should look at the overall financial picture.

“Sometimes people get caught up in trying to save money for their emergency fund, which is obviously important, or saving for retirement,” says Choi. “But if you have credit card bills or some other form of debt that carries high interest, you should definitely focus on that.”

&copy 2024 Global News, a division of Corus Entertainment Inc.

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