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Family flight, taking a holiday.

A falling dollar is like a pay cut.

Just what you need in the slow-to-no-growth economy, right? More chipping away at your financial stability at a time when the stock markets are awful, returns on savings are pitiful, oil prices keep falling and there's little good news in the job market.

Our personal finances are under pressure in a bunch of different ways today, and we need to understand what's happening so we can take steps to protect ourselves. The dollar's decline is the end result of global investors sizing up Canada economically and giving us the thumbs down.

A low dollar is said to be medicine for the economy in that it makes our exports cheaper in foreign markets. But the side effects are nasty. As the dollar falls, it makes the many things we import from the United States more expensive. Not just discretionary purchases like cars, books and clothes, but also staples like fruits and vegetables.

Here's where your pay cut comes in. With cauliflower now running at $7 and broccoli at $4, healthy eating costs you more. In a discussion on my Facebook personal finance page about rising food costs, someone suggested economizing by buying frozen vegetables (you save in part by cutting the waste of having unused food go bad). But the bottom line is that you're spending more to buy usual food your family eats.

Inflation, as measured by the basket of goods and services monitored by Statistics Canada, has been mild for a long time now. But your personal inflation rate, especially if you have a family with growing kids, may be significant. If your wages aren't keeping up, then your standard of living is falling.

Snowbirds and other Canadians travelling to the United States are also being hammered by the dollar's decline. My wife and I are going to New Orleans shortly. I checked the foreign exchange office in the lobby of my office building recently and was quoted an exchange rate of 1.445, or $144.50 Canadian to buy $100 in U.S. dollars.

One of the biggest cost-saving moves you can make this year is to travel in Canada instead of heading to the United States. We're looking at Newfoundland this summer.

This is such an inopportune time for the dollar to be sinking. Our sense of financial well-being has already been hurt by falling stock markets and the resulting declines in our retirement savings. These losses will give way to more gains ahead, but in the here and now we're being hit hard. Keeping money in cash is the usual response to falling stock markets, but on an after-inflation basis there's barely any reward at all for doing this beyond sheer capital preservation.

Bank of Canada Governor Stephen Poloz said last week that it could take three years for Canada to work through the economic issues that are driving our dollar down. So let's get work figuring out how to navigate this period with minimal damage to your personal finances.

The best thing we have going for us is that interest rates remain low and may even sink marginally lower. Your savings won't benefit, but your debts will remain manageable. Want financial flexibility in case you lose your job or have your hours cut back? Pay down your debts and be cautious about taking on new debts.

I said in a column late last year that in personal finance, 2016 was the year of the emergency fund. Every piece of negative economic news makes this more true, including the decline of the dollar.

Keeping some of your savings in U.S.-dollar accounts makes sense because the loonie could easily fall more. For reference, the all-time low of 61.8 cents (U.S.) was reached in early 2002. Currency markets are notoriously erratic, so don't make too big a big bet on the U.S. dollar over our currency.

Finally, see what you can do about offsetting your pay cut caused by the falling dollar. If you're spending more on groceries each week, dial back your restaurant spending. If books are getting beyond you, check out how libraries are letting you borrow electronic books to read on your phone or tablet. Keep the family car instead of replacing it with something new.

Life with a low dollar involves sacrifices. It will be worth it if it gets our slow-to-no-growth economy moving again.

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