There are a couple of pubs on the main drag in my neighbourhood and both have been busy in the months since pandemic lockdowns ended. I wonder whether that will continue through 2022 if food inflation keeps rising.
Food inflation in grocery stores and restaurants is one of the top personal finance stories of 2021, and it looks the year ahead will bring more of the same. How will people adjust their food-shopping habits in 2022?
In a recent survey by the Agri-Food Analytics Lab at Dalhousie University and a cashback reward app called Caddle, 52.8 per cent of participants said they will use coupons more, 51.7 per cent of participants said they won’t eat out as much, 45.5 per cent said they will read flyers more often and 31.9 per cent said they would visit different food stores. We all know which of these measures will deliver the most significant savings – visiting restaurants less.
A visit to good restaurant or bar is one of life’s pleasures. My wife and I certainly jumped on the opportunity to have a cold drink on one local pub’s patio last spring. That pint of Creemore Springs lager could be my all-around most enjoyable drinking experience of 2021.
But something may have to give if inflation keeps building in supermarkets and restaurants. The Dalhousie Agri-Foods Lab is part of a group that produced a forecast saying food prices overall will rise as much as 7 per cent next year, or up to $966 for the average family. In the survey on food-buying intentions, almost two-thirds of participants said food prices are increasing much faster than their income.
Restaurants were hit hard in the lockdown phase of the pandemic and a lot of people feel protective toward them now. But there’s only so much food inflation Canadians can swallow without cutting back.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob’s personal finance reading list
It’s getting easier to be green
Green investing, aka socially responsible investing, seems to be hitting its stride. Interest among investors is rising, and the financial industry is launching plenty of new products. The Globe and Mail has created Green Investing 101, a course delivered by newsletter to help you get started with a socially responsible investing approach.
The investment from hell
A twentysomething writes about losing close to US$400,000 on an investment he made using a free trading app. A case study in sending good money after bad.
The 60-year career
Longer lifespans mean more people will live to age 100, which in turn suggests they might spend 60 years in the work force. A longevity expert says this outlook calls for a redesign of careers to enable people to scale their workloads up and down according to need. For example, parents of young kids could reduce hours worked.
Best day and time to list your house for sale
The finer points of putting your house on the market, including the best season, day and time to get it listed.
Ask Rob
Q: For many years, we considered bonds a cornerstone of our portfolio to provide some long term security. Recently, with bond yields so low, we are very heavily weighted on preferred share ETFs and high-yield, dividend-paying stocks. With the threat of a stock market adjustment and reports of rising bond yields, is it time to adjust our portfolio to include a heavier weight on bonds?
A: The benchmark FTSE Canada Universe Bond Index was down about 3.5 per cent for the year through mid-December on a total return basis, which means interest payments combined with changes in bond prices. Bond prices could fall further if forecasts for multiple interest rate increases by the Bank of Canada next year are correct. Suggestion for investors who would like more bonds and are concerned about stock market risk: Consider averaging into bonds or bond ETFs with regular purchases over 2022, say, quarterly. Remember that falling bond prices mean higher yields for newly invested money.
Do you have a question for me? Send it my way. Sorry, I can’t answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
How gains in cryptocurrency are treated by the Canada Revenue Agency.
The money-free zone
By now, everyone knows about the great Beatles documentary Get Back. Another music doc worth your time is Summer of Soul, about a 1969 music festival in Harlem that featured Sly and the Family Stone, Mahalia Jackson, Stevie Wonder, Gladys Knight, Nina Simone and more. Next up for me is the new Velvet Underground documentary. I’m busy shuffling our household streaming subscriptions to accommodate watching all of this.
Watch this
University of British Columbia professor Elizabeth Dunn has studied what makes people happy. One answer: Spending money on others.
ICYMI
- Holiday shoppers are choosing gift cards amid pandemic and supply-chain woes
- This B.C. millennial, 32, quit his corporate job in search of a ‘stress-free life’
- Did you bring home a pandemic pet? The costs have never been higher
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing ... and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
