Pattie Lovett-Reid

Chief Financial Commentator, CTV

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I can’t help it – I’m feeling unsettled, and when that happens, my defense mechanisms kick in.

I thrive in an ever-changing environment. New opportunities have a way of presenting themselves like a well-written book where plot thickens and the end of the story can surprise you. This feels different, and as we all know, there is a lot happening on a geopolitical basis that could surprise us.

Entrepreneurship is the backbone of the Canadian economy and there will be savvy Canadians who will develop new trade relationships and will find ways to take a challenging situation and make it work.

In the meantime, we can’t change what the Trump administration will do and I’m not a fan of trade wars.  History would dictate that tariffs often hurt the implementer more than the intended recipient and it feels like a race to the bottom.

As the rhetoric around trade intensifies with prices on some goods headed higher and the increasing odds of an interest rate increase by the Bank of Canada, for now a cautious tone should prevail. We need to take control where we can.

Many Canadians are already living close to the margin, with not a lot of disposable income left over at the end of the month. Understandably they might also be feeling an element of cautiousness. Higher rates would be tough enough to adjust too but the added increases in prices due to tariffs and it can feel like a one-two punch. The good news: it isn’t a knock out. As they say in boxing, it isn’t about being knocked down on the mat, it’s all about how you get up.

Here are a few ways of dealing with change and getting up off the mat with ease:

1. Develop a plan ‘b’. No one expects to lose their job but if you do, having some idea of what you might do next is simply prudent.

2. Again, do a stress test on your budget to ensure you can withstand gradual increase in rates and pricing pressure.

3. Look for ways to cut back on your discretionary spending, and where possible, negotiate for better terms. You won’t get what you don’t ask for.

4. Comparison shop regardless of tariff increases.

5. Create a spending plan. More importantly, stick to your spending plan.

6. Review you debt payments. No matter how great the interest rate may be, shopping around for a better rate could put more money in your pocket.

Finally, keep your money from yourself. I’m talking about the disconnect between saying we will be better savers, we will spend less, and we will shop around. It is human nature to not always do what we say we will do. In this cautious environment it really is time to embrace frugality.