Inflation: Canadian parents feel the pressure

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 ten, 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.

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 stretch much these days for everything from diapers to daycare, family picnics, and vacations are harder on the wallet as the cost of filling up your tank and travel prices soar.

Young parents are unaccustomed to such rapid price increases; Not many were born yet when inflation reached that 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, the biggest driver of inflation in the period.

These financial banks are “really hurting a lot of Canadians now,” he said. Meanwhile, appetite grows, clothes need to be replaced, sports, classes and extracurricular activities are on the rise. “If you have a young family, it is the most precious part of your years.

“I’m going to be 65 next February – hard to say – and when you were 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.

For Montreal residents Nabeel and Samia Hallish, large grocery bills and fees charged for pumps have 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.

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 soared higher in a frantic buying streak that has led families to stretch their budgets to enter the market or upgrade to more spacious pits amid COVID-19 restrictions and ultra-low prices.

The Canadian average rent jumped 9.5 percent in June from the previous year, 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.

This report was first published by The Canadian Press on August 3, 2022.

Leave a Comment