Inflation was up again last month.
It seems to have lost some steam, phew, but the Bank of Canada does not need to be confident. This month they are definitely sounding hawkish.
Not great news.
Not only because it is overall bad news in our faces again, but also because we feel this in our bank accounts. It is starting to hurt and be noticed by the majority of our clients. Please know if you are feeling this pinch… you are NOT alone. You are the majority and across Canada regardless of which province you live in.
I have been having a similar conversation day after day, and it is a painful one. Clients are feeling tight on cash and are either going into debt to maintain, or they are sacrificing the things they prioritize the most. Events. Activities. Holidays. Date night. Sports for the kids. The list goes on.
Whenever possible, do the best financial decision for yourself and /or your family. Please do! There is also a spot that is possible to hit that you have made every adjustment possible, you got rid of Netflix. You changed your cell phone provider to save money. You sold the V8 and got a 4 cylinder, you get rid of the regular Amazon purchases… and yet the money is still tight. What the heck right!?
Inflation and interest rates on debt will continue to take the money we have worked so hard to earn and it doesn’t have a clear end in sight. 6 months, 12 months, 18 months? No one is for certain. Long term we are certain that this cannot continue, but there is still 1-2 years of inflationary pain to come. Likely to increase or stay the same, plateau for a while and then finally see prime rate come back down.
My recommendation is to do all you can to cut expenses that are not priorities and core values. Once that has been done, it is ok to re-amortize your mortgage. It is ok! You do NOT have to be a hero. Honestly. If you were to lose 3 years of gains on your mortgage in order to keep your home and the things you dream of and value with your family and friends… I would think you will forgive yourself when you are mortgage free 3 years slower than you originally were. Or 2 years, or 5 years, whatever relief you are needing by stretching out your mortgage.
You can always use lump sum payments to tackle it quickly in the years ahead and gain on the lost ground. That is also possible and penalty free to do so. It doesn’t have to mean long term extension on your mortgage either. We can create a plan that will turn your extension to get through the hard years right now, and then get caught back up and right back on track with your original mortgage amortization.
If this is you, feel free to reach out to the team and I. We are here to help. We would be honoured to and can run any and all numbers to show you what relief can look like, as well as what catching up looks like. We can decide to hang in there. Or not.
You got this friends, family and clients! You got this.