Why Seven Cents Matters

Starting this week, addicts across the country will have to pay an extra seven cents for a large coffee at Tim Horton’s.

Most people won’t even notice the 4.5% increase to their morning cup of java, their afternoon pick-me-up but you MUST know this is only the beginning.

Actually, the steady and sometimes startling rise in prices has been especially noticeable in the last few months. The high oil prices result in higher transportation costs and these translate to higher prices at the grocery store. And the more processed the food you eat, the more opportunities for price increases as the commodity changes hands in its transformation to the finished product.

And if a major chain like Tim Horton’s fires the first shot, how long before others take the same step?

And what do you get?

Inflation.

(Cue sinister music.)

But what does this mean?

Everything will continue to get more and more expensive but I haven’t seen my salary increasing by 4.5% to cover the additional cost of my Tim’s indulgences.

There is an even chance I will not have a job at the end of July so I have been building up my emergency fund. I have less wiggle room so a few extra pennies here and a few extra pennies there are making a difference. There is never a good time to be out of work but with the economy still fairly shaky, it is starting to feel like the early 90’s all over again.

But this seven cent increase on a large double-double is small compared to the jump in gas prices at the pump or the cost of heating one’s house. Cable has gone up, so have property taxes, water and sewage, electricity….

Where is it going to stop?

My mom has been thinking about buying (putting a down payment on) a place in Toronto when she sells her place in Port Elgin and my youngest brother would love to get a place of his own but housing costs in Toronto are high. With everything costing more, it almost doesn’t make sense for them to move out on their own. That is a family discussion we will have to have soon.

Without realizing, I have essentially been battening down the hatches. I haven’t started to squirrel away gold coins under my mattress à la Scrooge McDuck but come to think of it, that may not be a bad idea since gold is an inflation hedge….

There is no need to panic just yet but being aware of what is happening- especially with the federal election in a few weeks- and acting accordingly, is just prudent.

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~ by angryegg on April 12, 2011.

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