One of the things keeping inflation too high is that pay increases have averaged 5 per cent since the middle of last year.
Inflation exceeded wage gains for a while in the past two years, but the most recent increase in the cost of living came in at 3.1 per cent. Based on average wage growth, Canadians are getting ahead of inflation. It doesn’t feel like this is happening, though. High interest rates and expensive living costs have caused people to cut back on spending, and evidence of financial stress is growing.
Working readers of the Carrick on Money newsletter – have you had an inflation-beating pay increase in the past year? Let me know if 5 per cent sounds like your life, by taking this short and anonymous survey.
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Rob’s personal finance reading list
Tips to keep your credit card safe from scammers
Worth a read to make sure you’re doing everything you can to keep your credit card safe from scammers. One thing I do is check my card statement often – at least once or twice a week. I also check my main bank account regularly and, yes, I have spotted scam debits that my bank reversed.
The $10,000 trip planning mistake
This is sad. A retired couple from P. E. I plan the honeymoon they never had – an eight-day tour of Ireland. Their trip ended in the Halifax airport, where airline staff could not fix a small error made in booking the tickets. Pathetic service, but also a warning about ensuring that the name on your airline ticket exactly matches your name as shown on your passport. Now, for a warning that your winter jacket could be counted as carry-on luggage when flying.
The loyalty reward encyclopedia
A phenomenally comprehensive overview of 70 different loyalty reward programs, including a list of top picks. Many retailers included here, as well as credit cards, frequent flyer programs, gas stations, grocery stores and more.
At home with Neil Young
Q: I am 81 and am required to withdraw about $4,500 a month from my registered retirement income fund. Assets in my RRIF are dividend stocks and preferred shares. Because the dividends are not quite enough, I am forced to sell something every few months, which really hurts. Any ideas?
A: What about keeping some RRIF money in a high interest savings account, which is a savings account packaged as a mutual fund? There’s no cost to buy or sell ISAs, they typically benefit from deposit insurance, they can go in any type of registered or non-registered account and all investment dealers offer them. When you need to top up your dividends to make your mandatory minimum RRIF withdrawal, you could take what’s needed from your ISA. The return available from these accounts will fall as interest rates move lower, but they still offer a viable way to store cash in your RRIF.
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.
Tools, Explainers, Guides and Charts
A calculator to help people in several Canadian cities see if installing a heat pump would save them money over their existing heating and cooling system.
An introduction to the 50/30/20 budgeting rule – 50 per cent of your income for needs like rent or mortgage, 30 per cent for wants like entertainment and travel and 20 per cent for savings. Keeping needs to 50 per cent these days is the challenge.
On social media
What I’ve been writing about
– Yes, restaurant tipping has gone too far
– Higher CPP contributions could cost a young worker up to $15,000 more over a career – call it a bargain
– My investments averaged 6.4 per cent over the past five years – is that good?
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.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle