Much of the increase was due to gasoline prices increasing by 54.6% since last June, but seven of the CPI’s eight major components had also risen by 3% or more in that time. That included food, household operations, furnishing, and equipment, clothing and footwear, health and personal care, and recreation.
The passenger vehicle index rose by 8.2%. Service prices climbed 5.2% year over year in June. Travel costs also rose, with accommodation 49.7% higher year over year and air transportation rising 6.4% month over month since May. Prices also rose more in June than in May in all of the provinces except British Columbia and Prince Edward Island.
With clients being squeezed in almost every direction, Rubach expressed particular concern for those who may have to renew their mortgages in five years, when they may have just qualified now. Given that interest rates could climb to 8% from the 1.2% that they may have just qualified for, and incomes not keeping pace with that, she said, “people need to get in front of that. Don’t let it become a problem or you could be in trouble in four or five years.”
Rubach encouraged advisors to dust off the financial plans that they’ve already done with their clients or create those to help their clients get a solid financial picture of their income, expenses, and goals, and how all of those fit together. If there are challenges, such as renewing a mortgage at much higher rates later, it’s time to help them consolidate and make the essential choices now before they risk losing their credit-worthiness, which could force them to sell their homes.
“Clients need to have a plan to understand the implications of their decisions,” said Rubach. “A plan doesn’t mean sacrifice and torture. It means you know where you’re going and how things fit together.
