iQuanti: The Bank of Canada has already raised its overnight rate twice this year, and with more increases expected, the cost of borrowing is going up. Personal loan interest rates are rising in Canada as inflation moves higher. Personal loans are typically based on the prime rate, so as that goes up, so does the interest rate on personal loans. This is bad news for borrowers, but good news for savers. If you have money in a savings account, you'll start to earn more interest as rates rise. However, if you have a personal loan, your monthly payments will also increase. So, it's important to keep an eye on inflation and factor it into your personal financial planning. 

Rising inflation in Canada

There are several factors that contribute to inflation, including the prices of energy and other commodities, as well as changes in government taxes or fees. The most important factor influencing inflation in Canada is its economy's overall performance. When the economy is doing well, businesses tend to raise prices in order to maximize profits. Conversely, when the economy slows down, companies may lower prices in order to encourage more spending.  

Inflation can have both positive and negative effects on the economy. On the one hand, it encourages businesses to invest and expand, since they can expect to see a return on their investment thanks to higher prices. On the other hand, inflation can erode purchasing power, making it more difficult for consumers to afford goods and services. Rising inflation can be a challenge for any household. But there are steps that Canadians can take to help offset the impact of rising prices. 

Adjust your spending habits

One way Canadians can save money during this time is to adjust their budget. Review your spending and see where you can cut back, even by a little bit. You can do this by shopping around for the best deals on groceries and other essentials. Compare prices at different stores, and don't be afraid to buy in bulk or take advantage of sales. Another way to save money is to cut back on unnecessary expenses. If you can live without that daily coffee or new outfit, you'll be surprised how much money you can free up in your budget. This will help make up some extra cash that you can use to cover unexpected costs or simply save for a rainy day. 

Increase your income

It may also be a good idea to increase your income if possible. This can be done by working overtime or taking on a part-time job. By increasing your income, you will be better able to offset the effects of rising inflation. 

Invest in yourself

Another way to cope with rising inflation is to invest in yourself. Consider taking some money that you would normally spend on luxuries and instead use it to improve your skills or education. This will pay off in the long run as you'll be better equipped to deal with inflationary pressure and earn more money over time. 

Delay nonessential major purchases

One of the best things that Canadians can do is to delay unessential major purchases. By waiting to buy big-ticket items until prices stabilize or even drop, you can save yourself a lot of money. Of course, this isn't always possible or practical. But if you can make do with what you have for a little while longer, it can pay off in the long run. 

Final thoughts

Finally, Canadians should keep in mind that inflation is not always a bad thing. In fact, it can actually help to boost the economy by creating jobs and driving up wages. Therefore, it is important to remain calm and composed during periods of high inflation.