Albertans are saving less due to spending more on basic needs

Lately, you might be wondering why it feels like you’re spending more on food, gas, housing, and transport.

That’s because you are, according to Statistics Canada, which is reporting Canada’s inflation rate has increased to 4.4% in September from a year earlier, the highest rate since 2003.

The cost of living is rising and Albertans are not immune to its consequences, a fact supported by BDO Solution’s fourth annual Affordability Index poll stating that Albertans are saving less due to increased spending on essentials.

As Canada trudges through the fourth wave of the pandemic and looks ahead to life after COVID, the fourth-annual BDO Affordability Index finds that the pandemic mixed with the rising cost of living are negatively impacting the standard of living and finances of its residents.

“We did this Affordability Index last year and it revealed some of the impacts of the pandemic. This year, those impacts are becoming a little bit more striking,” says Calgary BDO Canada Limited VP and Licensed Insolvency Trustee Marie Kozlowski.

“The results show that COVID is eroding the standard of living for many Canadians, including Albertans, and that is now being compounded by the rising cost of living.”

Alberta is not immune to financial issues

Kozlowski says it’s particularly difficult in Alberta because the province was already dealing with the downturn of the oil and gas economy before the pandemic.

“We see the impacts of the cost of gas, the cost of groceries, and the cost of housing. There are all of these things layering one on top of another,” she adds.

According to the Index, almost half of Albertans (46%) are saving less, while 22% are saving more during the pandemic. Of the residents saving less, close to two-thirds (63%) say it is due to increased spending on essentials, which is higher than the national average at 57%.

That means many Albertans are adding to their debt levels and the biggest impacts are being felt when it comes to buying a home or saving for retirement.

“Housing costs are also challenging for Canadians. Many people facing housing costs challenges are unlikely to own a home in the next three years because they can’t afford to save for a down payment,” she adds.

Where Albertans can turn for help

The stats show that one-third of people surveyed are already having trouble picking themselves up from last year.

“One thing I did notice from this index is that many people just do not know how to improve their financial situation, they’re just not seeing the light at the end of the tunnel,” Kozlowski says.

However, Kozlowski says there is help for those who continue to be financially impacted.

“For those feeling overwhelmed, who say it is a challenge to put food on the table for themselves and their family. And for those who aren’t confident they will be able to restore their standard of living to the level it was before the pandemic due to the debt they incurred.”

There are many options for people facing debt problems, including re-evaluating short and long-term financial goals, putting in place a S.M.A.R.T. debt repayment plan, adjusting their household budget, or a consolidation loan.

For others, it may be a consumer proposal or bankruptcy.

That’s where a Licensed Insolvency Trustee can help people learn about their options.

“Even if you don’t feel like you need professional help right now, there’s no obligation. Knowledge is power – and you will know what to do if things become unmanageable,” Kozlowski adds.

If you are looking for help, BDO offers free consultations.