From childcare and housing to food and vacations, here’s how inflation affects family budgets

Carlene St. Jules may have to cut her family vacation short this year, thanks to rising inflation.

“Everything here, it costs $300 and up,” she says of hotel rooms in Montreal, where she has a family and previously studied dance.

“To fill my closet…Coming here was like $89. I have a small four-door Kia.”

St. Jules, a 29-year-old event coordinator who now lives in New York City with her three children, ages two, seven and 10, says she “brought them here so they can see my old land — but I don’t know how much I’m going to tread here at these prices.” “.

From ballooning grocery bills to expensive extracurricular activities, parents are facing increases in the cost of living that make them anxious about the opportunities for their children and the stable financial future of their families.

The cost of just about everything is going up

Inflation hit a 39-year high in June amid an economy hampered by COVID-19, labor shortages, supply chain challenges and the looming threat of recession.

Money doesn’t extend much these days for everything from nappies to daycare and family picnics. Additionally, vacations are harder on the wallet with the higher cost of gas and higher prices for places to travel.

Young parents are unaccustomed to such rapid price increases; Not many were born when inflation reached this pace in 1983.

Scott Hannah, CEO of the Credit Counseling Association, said that mortgages and rents, along with auto loans, take some of the biggest income out of parents’ income.

For drivers, prices at the pump have risen even faster — gasoline prices for June, the latest month available, were 54.6 percent higher than the same month in 2021, according to Statistics Canada data.

These financial banks are making things difficult for Canadians, Hannah said. Meanwhile, children’s appetite grows, clothes need to be replaced, sports, classes and extracurricular activities escalate. He said that creating a small family is the most precious time in a person’s life.

“I’ll be 65 next February—hard to say—and when I was a kid it wasn’t a big deal if you didn’t have the latest and greatest. But boy, it sure is now,” Hannah said of the pressures of consumer trends.

There is no rest

For Montreal residents Nabil and Samia Hallish, high grocery bills and exorbitant fees for pumps prompted them to look even harder at food sales.

“We see her clearly in the grocery store,” Samia said, after she and her husband walked out of a secondhand clothing store in Montreal with their two daughters, ages 2 and 10. “Everything is more expensive than usual.”

Families with young children often have a parent on parental leave, out of work, or working part-time, which adds to the financial stress.

Consumers may have noticed the effect of high inflation firsthand at the grocery store and gas pump, but the cost of just about everything is increasing exponentially. (Ben Nelms/CBC)

Home prices and rents have also risen throughout the pandemic. The national home price index, which is adjusted for price fluctuations, peaked at $835,000 in March, capping a two-year high of 52 percent, according to the Canadian Real Estate Association. Prices have soared higher in a frantic buying streak that has led families to stretch their budgets to enter the market or upgrade to more spacious homes amid COVID-19 restrictions and ultra-low prices.

The Canadian average rent jumped 9.5 percent in June from a year earlier, although it remained 3.5 percent lower in June 2019, according to Rental.ca, an apartment search site.

“A lot of young families in the past two years have taken advantage of this opportunity, #1, to start their family, and #2, to get into that first home,” said Leah Zlatkin, a mortgage expert at LowestRates.ca.

Many pushed their budgets to the limit for their monthly down payments and interest – which immediately started rising as the Bank of Canada started raising the key rate.

“For these people, when you see a variable rate increase, it can be a little shocking,” Zlatkin said.

For homeowners worried about their situation, Zlatkin suggested sitting with the mortgage broker to discuss refinancing. If payments seem beyond her means at the moment, she said clients should immediately inform the mortgage provider, who can offer a payment deferral program or a temporary interest-only payment plan.

It is also required to take a clear look at what can be removed from the budget – or replaced with less expensive options.

“Late at night while you’re bottle-feeding or breast-feeding your baby, flip the Flipp app and find some deals and match prices when you’re at the grocery store.”

Hana suggests buying in bulk – small families can team up with big ones – cash out loyalty points and swap brand-name brands for generic ones. It may be wise to have a slightly awkward conversation with family members to lower expectations of holiday gifts.

“No one wants to receive a gift from someone who cannot give it,” he said.

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