Parents of young children hit by inflation

Money doesn’t let you do that much these days. Basically everything from diapers and daycare to family outings and vacations are getting tougher on the wallet as the price of a full tank of gas and travel accommodations soars.

Young parents are not used to such rapid price increases; Many were still childless when inflation last reached this rate in 1983.

Scott Hanna, CEO of the Credit Counseling Society, said mortgages and rent, along with car loans, are among the biggest drains on a parent’s income.

For drivers, prices at the pump have risen even faster – according to Statistics Canada, gasoline prices in June were 54.6 higher than the same month in 2021, according to the most recent data. This is the main driver of inflation during this period.

Those financial losses are “really hitting a lot of Canadians right now,” said Scott Hanna. Meanwhile, hunger increases, clothes need to be replaced, and sports, classes, and extracurricular activities multiply. “If you have a young family, this is the most expensive time of your life. »

Montreal’s Nabil and Samia Haliche are persuaded to put more effort into bargain hunting with higher grocery bills and payments at the pump.

“You can clearly see it in the grocery store,” Samia said, after she and her husband left a second-hand clothing store in Montreal with their two daughters, ages two and 10. “Everything is more expensive than usual. »

Families with young children often have a parent on parental leave, who has taken a break from work or is working part-time, which adds to the financial burden.

Home prices are rising

Housing prices and rents have also risen throughout the pandemic. According to the Canadian Real Estate Association (CREA), the national home price index, which adjusts for price volatility, peaked at $835,000 in March, up 52% ​​in two years.

Prices have soared on a frenzied shopping streak that has seen households stretch their budgets to enter the market or move to larger spaces during a period of pandemic lockdowns and ultra-low interest rates.

Average Canadian rents rose 9.5% in June from a year earlier, but were down 3.5% from June 2019, according to Rentals.ca, an apartment search website.

“Many young families have taken advantage of this opportunity over the past two years, first to start their families, and then to move into their first home,” observed Leah Zlatkin, mortgage expert at LowestRates.ca.

Many pushed their budgets to make a down payment and hit their monthly interest limit – which quickly began to rise when the Bank of Canada began raising its prime rate.

“For these people, seeing variable rate increases can be a bit of a shock,” Leah Zlatkin explains.

For homeowners worried about their situation, he recommends sitting down with a mortgage broker to discuss refinancing. If payments seem out of reach at this point, he believes consumers should immediately notify their mortgage lender, who may offer a payment deferral program or a temporary interest-only payment plan.

A clear view of what can be taken out of the budget – or replaced by less expensive alternatives – is also necessary.

Scott Hanna recommends buying in bulk — smaller families can partner with larger ones — cashing in loyalty points and swapping names for generics. Even a little awkward conversation with family members can be a good idea to ease the anticipation of Christmas presents.

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