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You can’t budget your way out of inflation: Momentum

This piece was contributed by Carolyn Davis and Jenna Shummoogum with Calgary-based Momentum. November is Financial Literacy Month in Canada.

As an organization that supports people who have financial or economic barriers, we often get asked to provide tips and tricks for managing the impacts of inflation.

How should people handle the rising costs of groceries? How can they reduce expenses? Where can they save on insurance or energy costs? While there is value in looking at our habits to see where we can reduce costs, this focus still puts the onus on the individual.

Inflation is at an all-time high, hovering at 6.5 per cent (8 per cent in August). The rhetoric says that if we could just learn a few more tricks, or if were more disciplined, we would suddenly be able to balance the books. If a person just worked harder, or made better choices, they wouldn’t be experiencing poverty.

Someone living on a middle or higher income might experience inflation as a somewhat unwelcome intellectual exercise. In this case, tips can be energizing and can even inspire financial innovation.

But for someone living in the margins, tips can be distressing or even insulting. If you don’t have that extra five dollars for the rising cost of gas to get to your lower paying job, you don’t have time to cut coupons or go to another grocery store for a deal. Buying in bulk requires cashflow and storage space. Batch cooking requires time and equipment. Even calling to get a break on bank fees or energy costs requires time to make those calls during business hours.

Knowledge and skills around assets and budgeting are one part of the recipe for financial empowerment, and Momentum, along with dozens of organizations across the city, offer these workshops along with no-cost, unbiased financial coaching and savings programs.

Our research shows these programs do move people closer to a sustainable livelihood, but lasting change for vulnerable people in our communities will also require changes to systems and policies.

Community must lobby and advocate for changes: Momentum

Here is what we know: Poverty impacts single people the most. Many effective government subsidies are available for families raising children.

Those benefits have helped measurably reduce the child poverty rate in Alberta and Canada, but the rate of poverty for single people remains stagnant. A key reason is that income support for a single person considered employable in Alberta is set at 38 per cent of the poverty line.[1] People with disabilities and BIPOC folks also have higher rates of poverty.[2]

Meanwhile costs in Alberta continue to rise. The price of tuition rose by 5.7 per cent in Alberta, compared to the national average of 1.9 per cent. Monthly utility bills have increased after rate caps were removed in 2019. The cost of food rose in 2022 by 9.7 per cent.

A person on the margins can’t simply budget their way out of these rising costs. They may not be able to work any harder to make more money than those percentage increases.

As a community, it is crucial that we lobby and advocate for changes in the systems and policies that are keeping people in poverty, and we must work to reduce the stigma associated with accessing support.

For example, the provincial government should re-index both Income Support and Assured Income for the Severely Handicapped (AISH) so that Albertans on those benefits have more of a chance to make ends meet as the cost-of-living rises. (As a result of ongoing advocacy, the province just recently re-indexed AISH and seniors supports to inflation.)

In the meantime, if you need to access a school lunch program or food bank to meet your or your family’s nutritional needs, do it without shame. There are community resources out there to assist in finding a job, accessing health programs, and securing affordable housing. The phone number 211 is an excellent starting place for navigating Alberta’s web of supports. You can also contact your MLA to tell them about your situation and struggle.

Get the help you need, even you haven’t implemented every tip and trick on Momentum’s financial wellness blog.

  • About Momentum: Momentum is a Calgary-based charity dedicated to community economic development. Momentum offers a range of programs that help people living with systemic barriers to start a business, manage and save their money, and get a good job. Through, programs, policy research and advocacy, Momentum works with people, businesses, communities, and systems to increase each individuals’ income and assets and create a thriving local economy for all.  

[1] Poverty Snapshot in Calgary 2021 – https://prismic-io.s3.amazonaws.com/enoughforall/2378c6b9-1816-4d06-9dea-27805ecafd20_PovertySnapshot2021_FINAL.pdf

[2] Poverty Snapshot in Calgary 2021 – https://prismic-io.s3.amazonaws.com/enoughforall/2378c6b9-1816-4d06-9dea-27805ecafd20_PovertySnapshot2021_FINAL.pdf