There’s a lot of talk these days about whether rising inflation is a temporary thing or likely to be persistent. What we know for sure is that inflation is already wearing on people.
I asked in this newsletter recently what the biggest money worries for young adults are. Just over 35.8 per cent of those who responded chose rising house prices, which made it the top money worry. No shocker there – house prices have surged way ahead of incomes.
Inflation was a close second choice as top money worry. If you combine the number of people who were most worried about inflation in general with those who specifically cited food, gasoline and rent costs, you get close to 31 per cent. Inflation in general was selected by 20.2 per cent of the 417 people who completed the survey, while rent increases was chosen by 6 per cent, the cost of groceries was chosen by 3.8 per cent and rising gas prices by 0.7 per cent.
Some insight into why so many young adults are worried about rising prices can be found in some of the other selections for top money worry. Six per cent said low wages worried them most, 5.5 per cent chose high debt levels and 3 per cent highlighted underemployment.
We also asked survey participants about their biggest financial success of the past year. Buying a home took top spot at 23.7 per cent, which is no surprise because a lot of millennials bought houses in the pandemic. Just over 20 per cent cited finding a good job as their top success, and an identical number cited their gains in the stock markets or with other investments.
Almost 5 per cent of participants in the survey said their greatest success was negotiating a raise. This is a reminder that employees have unusual leverage as a result of a pandemic labour shortage. People are changing jobs at a higher rate than usual and employers are finding they need to offer something extra to keep and attract workers.
Let’s look at a few other financial successes that got mentioned only a few times or just once. Maybe they’ll inspire someone.
- Maxed out my TFSA
- Entered a debt management plan
- Frugal living
- Bought a cottage
- Became literate in personal finance
- Seeing the results of budgeting
- Worked hard and afforded the first year of university debt-free
There were some angry responses to the question about the past year’s biggest financial success as well. We get it. These are hard times for many people.
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Rob’s personal finance reading list
How to handle an inheritance
Advice from the Blunt Bean Counter on taxes and other matters related to receiving an inheritance.
What happens when you buy stuff online and then return it
One of the more depressing things I’ve read in a while. Your return may end up in landfill.
For landlords with slovenly tenants
How to notify a tenant about “poor housekeeping,” which can lead to issues like bugs and bad smells. Also some background on the responsibilities of tenants and landlords.
Three thoughts for the investor who has everything
How to invest in fine wine, litigation finance and music streaming royalties.
Ask Rob
Q: Are Buy Now, Pay Later programs financially sensible leading up to the holiday season?
A: No. For one-off expensive purchases like a computer, I get it that people would choose to use this new option from many retailers of paying for things in monthly installments, often with no added costs. But for holiday season shopping, I think BNPL is a path to overspending.
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
This is cool – a dividend investing calculator that helps you track how much income you could generate now and in the future from dividends, with or without dividend reinvestment plans (DRIPs).
The money-free zone
Michael Kiwanuka’s new song, Beautiful Life, is a beauty. I listened to it three times straight recently.
Listen to this
The CBC Radio show Ideas looks at whether a university education still delivers value. There’s a written summary as well.
What I’ve been writing about
- Households that made money in the pandemic should prepare for some financial pain
- These numbers show how the wealth of your parents is a deal-breaker for first-time home buyers
- Why variable-rate mortgages rule in the pandemic housing market – and maybe afterward, too
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.
Rob Carrick