Annual cost of living: Introduction
We all read the headlines. The annual cost of living is rising, interest rates are rising, house prices are rising, food prices are rising, everything is rising; everything except for our paycheques. How can Canadians expect to keep up with their financial obligations when their paycheques are the only things that seem to be frozen in time?
Annual cost of living: The Canadian consumer price index
According to Statistics Canada, the consumer price index is:
“…an indicator of changes in consumer prices experienced by Canadians. It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers.”
Statistics Canada measures the consumer price index against the year 2002. So as the base year, the 2002 consumer price index is the 100% level. The consumer price index has risen steadily every year since then. The annual average Canadian consumer price index for 2017 was 130.4%. The January 2018 Canadian consumer price index was up 1.7% as compared to January 2017. So, as you can see, up is the only direction our expenses go.
Annual cost of living: Frozen salaries breed discontent
This situation has created a great deal of dissatisfaction among employees. According to a poll conducted by Indeed (a major world-wide job hunting site):
- 83% of Canadians are dissatisfied with the pay they’re receiving
- More than 50% of employed Canadians are definitely going to ask for a raise this year
- “There’s no money in the budget” is the top reason for why requests for a raise are rejected, accounting for 63% of rejections (women hear this excuse far more often than men — 77% of the time, compared to 54% for men
- The average employee plans to ask for a raise of nearly $12,000, though 23% said they wanted a raise of $16,000 or more (Indeed cautions that when asking for a raise to do your research into the current pay scales for your job)
Annual cost of living: Unemployment is down and salaries are stagnant
Even though Canada has added 423,000 jobs over the past year and the unemployment rate has fallen to 5.7% (the lowest since 1976), salaries haven’t kept up. It seems that employers have gotten away with it by hiring temporary and/or contract workers. So, while your cost of living increases, your salary doesn’t.
Annual cost of living: What happens when the rising costs force you to go deeper into debt?
We wish you luck in getting your pay raise! But, if you’re one of the many Canadians who can’t keep up with your bills now and are feeling that pain, the Ira Smith Team can help.
Debt won’t eliminate itself. You need a professional trustee who understands your pain and can explain all of your options and come up with a solid financial plan for moving forward Starting Over, Starting Now. Give us a call today and book an appointment for a free, no obligation consultation. You’ll be happy you did!
