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Financial Friday #130: Top Tips to Beat Back the 2022 Financial Hurricane!

Saturday, October 8, 2022   /   by Mario Daniel Sconza

Financial Friday #130: Top Tips to Beat Back the 2022 Financial Hurricane!

An October 3 report from Statistics Canada on the financial state of Canadians says that "On average, regardless of a household's demographic or economic characteristic, gains in household wealth acquired over the previous year have been erased."


 


It's no secret that 2022 has been a financial disaster due to a perfect storm of rising prices and interest rates, poorly performing financial markets, and declining real estate values.


 


For younger Canadians, the statistics are even worse! Stats Can reports that disposable income for those under 35 took a huge drop from the second quarter of 2021 to the second quarter of 2022 and went from net positive to net negative during that period.


 


1. Reconsider your big three.


The "big 3" expenses for young Canadians are housing, transportation and food. Adjusting your lifestyle can save you huge money in these areas. For example, having a roommate isn't for everyone, and you may have grown to like your independence, but it could easily cut your expenses in half almost instantly.


 


Cars are another money pit for young Canadians. Your car loan payment, gas, regular maintenance, insurance, and repairs should consume a maximum of 15% of your take home pay. Going without a car might not be an option, but you could switch to a cheaper car or check out car sharing options available in your city.


 


2. Stay calm and learn to dismiss the hype.


Constantly being worried about "what could happen" only leads to unnecessary anxiety. We are constantly bombarded by cable TV news, You-tubers, internet experts, naysayers, pundits... and it can really pile on the stress. It can also lead to a lot of illogical decisions. Nobody can predict the future and we sometimes forget that fact when we are bombarded by hyped-up news reports day after day.


 


Financial market "experts" are a great example. There is always a steady stream of them predicting a huge crash and occasionally, they do get it right. However, the truth is that most of these predictions are flat-out wrong, and you would be much better off to ignore them and simply ride out market downturns. Markets always recover and it pays to stay focused on your original, long-term investing goals. Arian says, "trust me, I have been there, I bought into the hype, and the result wasn't good!"


 


3. Focus on what you can control.


No matter how much you read or talk about inflation and interest rates, they are way out of your control. The Bank of Canada is "expected" to raise interest rates again at their October 26 rate announcement and there isn't anything you can do to convince them otherwise. Likewise, you can't predict with any certainty which way financial markets will move. Over the past few weeks, they have bounced up and down by as much as 5% from week-to-week and where they are going next is anybody's guess.


 


3. Focus on what you can control.


No matter how much you read or talk about inflation and interest rates, they are way out of your control. The Bank of Canada is "expected" to raise interest rates again at their October 26 rate announcement and there isn't anything you can do to convince them otherwise. Likewise, you can't predict with any certainty which way financial markets will move. Over the past few weeks, they have bounced up and down by as much as 5% from week-to-week and where they are going next is anybody's guess.


 


If you are going to stress over your finances (which we don't recommend) focus on the things you can control:


 



 


Challenging times provide opportunities and motivation and are a great time to improve critical financial skills and attitudes that will help you throughout your lifetime. 


 


Resources:


 


Top 5 ‘big money’ retirement purchases you are likely to regret


It's tempting to splurge on some big-ticket items to kick off your retired life, but these 5 are likely to lose their luster very quickly and put a serious dent in your retirement nest egg.


 


Half of Canadians within $200 of not being able to cover bills


$200 isn't a lot of money these days, so it's pretty astounding that 50% of us feel that's about how far away we are from financial disaster.


 


More interest rate hikes needed says Bank of Canada


It looks more and more that we are looking at another 0.5% interest rate increase on October 26. That would put the BOC rate at 3.75%, a far cry from the 0.25% we had when 2022 kicked off.


 


Ten frugal habits to save money


These lists are a dime a dozen on the internet, but this one has some decent ideas and will only take a minute or less to review... why not check it out?


 


Financial stress grinding down employee wellness


The tables have turned and rather than stressing out at home due to a tough day at the office, employees are stressing out at the office due to a tough financial situation at home. A must-read for anyone working in human resources.


 
eXp Realty of Canada
Mario Daniel Sconza
4711 Yonge St 10th Floor
Toronto, ON M2N6K8
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Information is provided exclusively for consumers’ personal use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®.
Information is provided exclusively for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®. Copyright 2022 Last Updated December 2, 2022
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