May numbers are in, and Canadians may have been happy to see that inflation rose just 3.4% year over year for May 2023. However, it’s important to remember that inflation rose 6.3% in May 2022. So while the numbers may look like they’re improving, costs are still quite high.
This has left Canadians struggling to make ends meet. Especially as interest rates also rise higher, with more bumps likely from the Bank of Canada. And with summer around the corner, it’s perhaps leaving some concerned their summer plans will be left behind.
So today, we’re going to address some tips to fight back inflation. Here are some of the best ways to get your cash back in your pocket, and make some more along the way.
Identify what’s costing you the most
That’s right, it’s time to budget. Again. While budgeting is certainly not the most fun way to spend your weekend, taking a few hours could save you hundreds, maybe even thousands throughout the rest of the year.
There are many budgeting applications out there that can give you a rundown of every single item that you spend during each month. In fact, many Canadian banks provide details on how you’re spending your income, giving you a cheat sheet at what you’re spending the most on.
Once you’re able to see what’s costing you the most, see what you can cut! Items like housing, utilities and debt payments can’t be cut, but perhaps there are cheaper grocery items you can buy. Maybe you can swap a high-priced coffee for a Tim Horton’s. These little tricks can bring down your costs and increase your savings.
Use your credit cards
Yes, credit cards can certainly increase your debt. And that is certainly not what we’re aiming for here. However, there is no reason Canadians can’t take advantage of credit card reward programs, and banks or financial institution offers.
Canadians can go out and find a new credit card that fits their lifestyle, and look for those that offer at least one year of $0 in fees, along with tens of thousands in bonus reward points. The $0 in fees already saves you money, and the bonus reward points can be used to help you pay for those summer items you long for.
Just make sure to read the fine print. You usually have to meet a certain spending level each month. A great option is to then use your credit card to make bill payments when possible, and pay it back immediately. As in, right away! Don’t leave your credit card with payments sitting untouched, or you could be back in debt before you know it.
Earn as much interest as possible
Contributing to savings and investment accounts as much as possible is definitely one of the best ways to fight inflation. Of course, this is why creating a budget in the first place is so important. At the end of the budget, you should have an amount dedicated to automated contributions towards your savings and investments.
Once those investments are made, you can then go in and invest in high-yield stocks. However, make sure these are safe dividend payers that will either remain stable or see a recovery in this weakened market environment.
A great option these days would be Great-West Lifeco (TSX:GWO). Great-West stock currently offers a 5.99% dividend yield, with the dividend aristocrat trading at just 14.2 times earnings. The company recently sold some assets to bring in US$1.8 billion on the books, using it to make further acquisitions for future growth.
Great-West stock has a long history of dividend growth, with a solid 74.8% payout ratio. Furthermore, today’s yield is 22% higher than the company’s five-year average dividend yield, providing a deal for investors. Shares are up 19% in the last year, though down from 52-week highs, providing a 5% potential upside as of writing. So don’t wait around while inflation rises and your cash drops. Start saving and investing today.