Some Tips on Cutting Down on Expenses During High Inflation

What is inflation?

Inflation has been in the news a lot recently, but what exactly is inflation? And why have we seen such a large increase in the inflation rate since 2021?

Inflation is a measurement of the increase in the cost of goods and services over time, which in turn impacts the purchasing power of your money.

Alberta Securities Commission

For example, an apple today could cost you $1, but the following year it could be priced at $1.07. These rising prices mean that the quality of life for those with low, stagnant and fixed incomes will be significantly impacted, consumers will afford less goods and services, and businesses may generate lower profits. (Source: Alberta Securities Commission)

When inflation reached 8.1 per cent earlier this summer, Canadians saw a sharp increase for prices of many necessities including food, for which prices have risen by 10.8 per cent in the past year. After some actions from the Bank of Canada to reduce inflation, the latest inflation/CPI index went down to 7 per cent for August 2022, still a big leap comparing to 2 per cent inflation rate for Canada before inflation began.

Inflation impacts all Canadians; however, it poses the most challenge to low-income Canadians including post-secondary students those with a small income and budget.

Some tips on cutting down on expenses during high inflation

Over the years, the GSA has collaborated with many organizations, internal and external to the University of Calgary, to help graduate students gain knowledge to make better financial decisions.

For this high-inflation period, the GSA is suggesting a few tips for you and your family to reduce the impact of inflation on your financial resources. The GSA acknowledges students’ financial circumstances are varied, and the following recommendations might not apply to every student or situation.

1. Save at the grocery stores

Save at the grocery stores with these recommendations from Momentum:

1) Switch up your grocery stores,
2) Use ingredients that you can use for multiple recipes,
3) Use your freezer as much as you can,
4) Shop clearance and “rescue” foods (with caution!), and
5) Store food in smaller containers.
(Source: Momentum)

2. Cut down on your utility costs

Cut down on your utility costs in your home including the kitchen, laundry, and technology. Enmax, the default provider of electricity and gas in Calgary, compiles a list of easy and low-cost steps for Calgary residents to cut down on your electricity, gas and water costs. (Source: Enmax)

3. Use transit, share rides, or cut down fuel consumption of your vehicle

Commuting to campus can be costly. Consider using transit, sharing rides with another student, or use your car more efficiently. Here is a few tips to cut down on your fuel consumption from Momentum. (Source: Momentum)

4. Attend the GSA’s Inflation Workshop on October 19

You can learn more about inflation and how to reduce its impact on your finances with the GSA. Attend the GSA’s Inflation Workshop on October 19 to learn about inflation with Momentum and the Alberta Securities and Commission. Register for this event here

On-campus financial aid supports

Various on-campus financial education and support are available to current UCalgary graduate students. Below is a non-exhaustive list that current graduate students can explore:

• MoneySmart: provides financial workshops for graduate and undergraduate students
• UCalgary’s Registrar Office: provides support to help you set up your payment plans for tuition and fees, connects you with financial aids available to you as a student
• Awards, Bursaries, Scholarships: The University, GSA, and departments offer monetary awards, bursaries, grants and scholarships for eligible and successful applicants. The GSA also offers bursaries that can address urgent or non-urgent financial needs. For more resources, please visit the UCalgary’s Finance Overview webpage

General money management tools and resources

As the GSA doesn’t offer financial education or coaching ourselves, we rely on external partners who are experts in this area to provide valuable resources and services for graduate students. Two local organizations that the GSA highly recommends are Money Mentors and Momentum. They offer a wide range of resources, budgeting and expense tracking tools, and free financial coaching to get you out of debt, save more money, get a good job, and even start a business. For general money management tips, the GSA recommends the following articles from Money Mentors on some basic money management topics:

Create a budget and keep track of your expenses:

Having a budget and tracking your expenses allow you to know where your money is going, identify possible expense cut, and direct money toward your short-term and long-term financial goals. Here are the 5 tips from Money Mentors on creating and revising your budget.

Set SMART financial goals

Having SMART financial goals will help you best strategize your money management activities to meet your needs including investing in your education, saving for a house or a new family member, or saving for emergencies.

Be frugal if you can

It can be hard to cut costs, but for optional purchases, saving a dollar here or there can really add up. Therefore, creating good money habits could help you break big goals in manageable chunks. Pick 3 or 4 from these 10 tips from Money Mentors to try out over the next few months.

Some highlighted tips are:
1) Track your spending;
2) Automate your savings;
3) Shop second hand;
4) Save windfall income or use the rule of thumb (50-50 or 30-30-30); and
5) Institute a waiting period.

Read more about these 10 tips here