Living in a world where inflation is now a part of everyday life, is it possible to keep up with the costs of tuition, books, rentals, food, clothes, entertainment, and more? Daily, we see the news about these inflation numbers. But what does this mean for Canadian students’ pockets? Is inflation here to stay? Read on.
What is inflation?
Let’s start by understanding what we mean by “inflation.”
An economy experiences inflation when the prices of goods and services generally go up over time. The effect of inflation is to reduce the purchasing power of money, as can be seen in the rising prices of food, clothing, shelter, and other goods and services. When inflation takes place, the value of money drops, which means you need more money for your usual basket.
What are the causes of inflation in Canada?
There are a number of elements contributing to the high rate of inflation in Canada, including supply chain interruptions due to the pandemic. However, as the economy recovers from the effects of COVID-19, more factors are influencing the rise in prices of commodities.
Additional contributors include:
The increasing demand for commodities as a result of the nation’s strong economic recovery from the pandemic.
Higher oil prices and rising demand exacerbated by the conflict in Ukraine. This results in higher transportation expenses, which raises the cost of all goods and services.
- The cost of housing has increased due to a rise in demand for single-family dwellings.
- Due to a lack of workers, wages are rising and also pushing up inflation.
What does inflation mean for students’ pockets?
This past June, the Canadian inflation rate increased to 8.1%, marking a 39-year high. Students are particularly vulnerable to the effects of this rise in the cost of living, as it impacts their health and way of life. The majority of students make a modest living throughout the academic year from informal jobs like babysitting, part-time jobs, or summer employment. Many students lack financial savings and the capacity to pay rising costs due to inflation. 53% of young Canadians between the ages of 15 and 29 said they were extremely concerned about their ability to pay their rent. Students’ pockets have shrunk.
What are the effects of inflation on international students?
Canada has maintained its position as the top international student education destination over the years, even during the pandemic. However, many international students are now struggling financially as inflation continues to bite. Most international students are forced to work part-time jobs that don’t pay their rising living expenses because they are only allowed to work 20 hours per week as part of their study permits.
Moreover, many people see studying in Canada as a long-term investment that will pay off with better job prospects after graduation and the potential for immigration. The coveted “Canadian dream” is tempered by the uncertain nature of the journey required to get there because of rising inflation. For one, getting PR is going to cost more.
What can you do to beat inflation as a student?
This is the part where the lessons on “how to adult” come in handy. You can implement several lifestyle changes and still maintain a healthy balance. Read up on money-saving tricks and live them. A great money-saving example is buying your clothes, groceries, and toiletries on promotion. Look out for weekly catalogues with different deals from retailers across Canada. Buy your non-perishable food in bulk; find out if you can get deals on stationery, and books.
Moreover, see if you can get cheaper housing for 2023; perhaps opt for apartment sharing instead. This will also help you save on groceries and other household goods as you’ll only get to pay for a portion and your housemates will cover the other bit. With a bit of research and planning, it is possible to live through inflation and adjust accordingly.