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As the recent federal budget noted, the consensus view of economists is that a shallow recession is coming.

Other personal finance negatives to dwell on include the heavy load of food prices consistently rising at rates of 10 per cent compared with a year ago and high interest rates on mortgages, lines of credit and more. It’s easy to get mired down in all of this bad news because it affects so many daily and monthly financial interactions.

But a few things are going right today in personal finance, and they benefit a wide swathe of the population. In the first of what will be a periodic series in this newsletter, I want to highlight some the positives happening right now:

Wages: The most recent data on wages shows a 5.4 per cent increase in February for average hourly wages compared with a year earlier. Since last November, wages have risen by between 4.5 and 5.8 per cent on a year-over-year basis. The inflation rate in February was 5.2 per cent, which means wages were rising a bit more than the cost of living.

The job market: The unemployment rate in February was 5 per cent, which is extremely low by the standard of the past 50 years. The tight job market helps put upward pressure on wages, and it makes employers more willing to negotiate both pay and benefits with valued employees.

Savings: Interest rates on savings accounts are holding up, even as guaranteed investment certificate rates edge lower. Returns of 3 per cent on savings are still attainable from alternative banks, and you get between 4 and 5 per cent from high interest savings account mutual funds and exchange-traded funds.

Mortgage rates: It’s early to say anything definitive, but we seem to have reached a peak for both variable-rate and fixed-rate mortgage rates. Lower rates aren’t expected until early next year, but at least we can say that things won’t likely get worse for homeowners.

Stocks and bonds: They’re both up after a hellacious 2022, when both were down. That’s not how it’s supposed to work – bonds should rise or hold their ground when stocks fall. Rising interest rates last year hurt bonds badly. Now, financial markets are betting that rate hikes are done.

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Rob’s personal finance reading list

The day of the variable rate mortgage is done

Just 16.7 per cent of mortgages in January had a variable rate, compared with almost 57 per cent a year earlier. No longer do variable-rate mortgages save you a bunch over a fixed rate.

A survival guide for new parents

There’s a money section in this guide from Today’s Parent, and much more on everything from meal planning to losing your temper. Been a few decades since I was in the new parent business, but a lot of this guide hits the mark.

The cheapest electric cars in Canada …

… are not actually that cheap. All vehicles on this list cost between $40,000 and $50,000.

‘Economically, I’m in my 20s’

The New York Times reports on how millennials feel about their finances and their lives as they approach middle age. There’s a lot of angst here, caused in large part by what the article refers to as ‘cascading crises’ – the popping of the dot-com bubble, the Great Recession and the pandemic.

Ask Rob

Q: Registered education savings plan versus nonregistered investment for a newborn grandchild? Contributions would come from grandparents initially and sporadically in future.

A: Some people go with the nonregistered option in case a child does not pursue a postsecondary education. But my take is that RESPs are too good to pass up. RESP contributions of up to $2,500 per year receive a 20-per-cent matching government grant. A guaranteed 20 per cent return, in other words. A broad selection of colleges, universities and professional schools are eligible for RESP use. Here’s a rundown on how money in an RESP is treated if the beneficiary does not attend a postsecondary institution.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

Charts of Canadian home prices by city from 1999 to 2023.

The money-free zone

The singer Bria and her band have been working through a series of country rock covers, including a sad-song nugget from the 1970s called See You Later, I’m Gone. The song was originally performed by Robert Lester Folsom on an overlooked album called Ode to a Rainy Day.

Watch this

How does a credit score affect the rest of your finances?


What I’ve been writing about

  • These dividend stocks beat inflation two ways
  • A trust lesson on banking from a CIBC letter to clients about changes to their GICs
  • Federal budget 2023: Grading how it will affect your personal finances

More Rob Carrick and money coverage

Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.

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