Inflation is causing pain at the pumps and the grocery stores, but here are a few ways to help balance that

A local financial planner has some advice for Calgarians feeling the pinch

By Halen Kooper | March 28, 2022 |5:00 am

The average Calgary family of four is expected to pay about $966 more on food in 2022 than they did in 2021, according to a recent Canada Food Price Report.

Photo: Shutterstock

From supply chain issues and protests to the increase in the price of gas, a lot of everyday goods are becoming increasingly expensive.

Jeremy Clark, president and CEO of CH Financial, says that a lot of supply chains have been impacted due to the pandemic and other factors, leading to a shortage of port space and containers.

“If you look at just how goods move around the world, there’s a lot of bottlenecks right now,” he says. “I think that that drives the price of goods up because there’s a shortage of goods in several places in the world.”

How inflation is impacting the city 

When looking at how Calgary is impacted by inflation, one thing Clark says to keep in mind is that it’s a politically sensitive number.

“If you look at the price of gasoline going up and down,” he says, “a lot of politicians and economists will take things like gasoline out of the inflation number, which in my opinion, keeps the number even lower than it should be.”

Due to the separation of gas and goods, Clark sees Calgarians getting hit by inflation in two ways — once at the grocery store and again at the gas pump — both of which have climbed in price over the last few months.

Clark points to local grocery store prices of milk being up 12% or bread being up 10% being a struggle for many to digest. 

“There’s a lot of these sort of five to 20 per cent movements in the price of really necessary goods for people,” he adds. 

How does this inflation stack up to historic levels 

One thing Clark points out is the long-term historical rate of inflation in Alberta in comparison. 

“The long-term rate of inflation over the past 200 years is about three per cent per year,” he says. “Right now, we’re running around five to five-and-a-half per cent in Canada and Alberta.”

Clark says that inflation tends to settle down to its regular rate as the cycle progresses, but with the pandemic, the war in Ukraine, and supply chain issues, there’s no telling when that might be.

“How long that will take is anybody’s guess, we’re probably going to see prices go up in the short term, especially with the war in Ukraine creating a lot of uncertainty.”

What can the average Calgarian do to help balance these high rates of inflation? 

Clark has some advice for Calgarians who have been living pretty close to the line and he says it starts with financial planning and budgeting. 

“We preach this all the time in terms of having a budget, sticking to the budget, knowing what your budget is, and having some allowances built-in if you can, for the rising price of goods,” he explains, adding having a safety net is important if possible. 

“Even a three to four per cent jump in the price of something can impact the average person’s bank account.”

Unfortunately, while inflation can’t be controlled by a person due to its macroeconomic nature, Clark says that an individual can control their spending.

“You can look at restaurant meals: if someone’s eating out two, three, or four times a week, and they say, okay, maybe I can prune that down to once or twice a week,” he says. “It’s amazing the money you can save by taking something you enjoy and doing it a little bit less.”

Clark says it’s always good to have some sort of investment portfolio

It’s important to invest in things that move positively with inflation, Clark says. 

“As an example, having things like some real estate income, or dividend-paying stocks in the portfolio,” he adds. 

The reason this is important is that an individual can make their investments work for them.

“As inflation moves up, they will pay you more,” Clark says “As opposed to bonds where if inflation moves up, they’re going to pay you less.”

Clark also says it’s important to take a holistic approach to financial planning, but he wants to make sure people understand what he means when he says “holistic” because the word gets thrown around a lot.

“It’s just looking at the total person, so instead of just saying: we just want to manage your money, we don’t want to talk about anything else, no tax, no insurance, no financial planning,” he says. “We want to have as much of a big picture as possible for each client.”

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Halen Kooper

Halen Kooper is a contributor at Calgary Citizen.

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