3 Ways You Can Prosper Even With the Weak Canadian Dollar
If you could be anyone in Canada right now, Prime Minister Trudeau would probably be your last choice. He inherited the throne as the country reached its lowest economic point in recent years, much like Obama did when he was elected as President of the United States back in 2008. Whether he turns things around or not is debatable, although it would be nice if he could pull off some magic tricks that would reverse our economic plunge. But it’s a farfetched hope.
You’ll have to tough it for now. To enjoy life amidst the weak Canadian dollar, you’ll have to learn some survival tactics to prevent your finances and sense of security from tanking, now that recovery seems so far off. And preparation beats wishful thinking anyway.
You Need Survival Tactics
You can keep your apocalypse survival kit of canned tuna, flares and walkie-talkies in the bunker – the coping methods needed for the weak dollar involve your spending habits, not tools or hardware. Currently, the dollar sits just above 71 cents U.S. It’s a slight improvement from where we were a couple weeks ago, but still troubling nonetheless. The plummeting dollar will have its share of side effects too, most notably, price hikes. That could signal further rough patches along the road if you’re already dealing with financial problems. Consequently, identifying the expenses in your life, how the economy will affect them, and how you can brace for the impact is vital.
1. Exchange currency at different places
First of all, consider how the weak dollar may impact your travel plans. Whether it’s a new year’s resolution or long-time goal, many of you will leave the country to see some new (or familiar) sights aboard. Exchange rates, however, may be brutal, especially if you’re heading south to the U.S., or over to Europe. Are you doomed to lose big? Not necessarily. Buying foreign currency in the right way and from the right place can make your losses bearable, and give you reason not to cancel a trip. However, that means shopping smart, and looking into options you haven’t thought about before.
Tips for exchanging currency without burning cash
- Buy from the right source – Don’t exchange your currency at airports since they’ll charge you 5 – 10 per cent more than the best available rates. Banks do try to exchange currency at competitive rates, but there are specialty vendors out there that can find you lower rates than traditional institutions. Consider visiting these vendors as an option.
- Exchange currency online – You can also skip out on visiting a vendor altogether by exchanging your currency online instead. An obvious advantage is convenience, but it also benefits you in terms of value. Banks tend to charge mid-market rates for currency exchanges, while online companies charge a consumer rate, meaning better prices for foreign currency.
- Pay using CDN where possible – Some cruises and tours, mainly those based in and around the U.S, accept Canadian payments, so make sure to do your research. If you pay for a trip without having to exchange your money, you’ll avoid the losses that others will have to deal with.
2. Consider selling beyond your own borders
An article published in The Globe and Mail last May, suggested that small business owners should sell to international shoppers to stay afloat despite the sinking dollar. If you own a small business, you should give it thought as well. The article pointed out that Canada ranked at number four in the category of most popular online shopping destinations, for people in the U.S., the U.K., Australia, Brazil, China and Germany. So even if you see slow business from your fellow Canadians, your overseas counterparts may keep your revenue steady. Of course, that will mean having to tailor a business strategy to meet their wants and needs.
Reaching out to foreign customers
- Check out your competitors – Look at what your competitors overseas are doing. You want to give customers overseas a reason to choose you over their retailers that are local to their area.
- Test the market – Before selling directly through your website, consider using an online marketplace first. The benefits of using a site like eBay, is that it gives you large reach for a low cost – an advantage that not all websites have.
- Tailor your website – If a foreign market does seem ripe with opportunity, then start working on your website to meet the expectations of those overseas customers. List your prices in their currency, and make sure shipping/handling costs are clear. Additionally, address other issues such as language translation if necessary, along with site optimization for mobile devices.
3. Start shopping differently
A declining dollar means rising retail prices, and you’ll see this no matter what stores you go to. But that doesn’t mean the pinch has to sting. With that said, you’ll have to double check your purchase habits, and make changes to prevent your cash from running dry. First of all, accept the fact that some purchases may have to wait. You may even have to visit different stores and buy cheaper brands. And for the things you really need, you will have to think twice about how you shop as well. The frequency, the time and the quantity of what you buy may all have to change.
Shopping without going broke
- Slow down at the grocery store – If you’re used to choosing the finest cuts of meat, consider going for the more affordable pieces. If you’re used to buying certain exotic fruits, you might want to try eating local ones, which often tend to be cheaper (since they don’t need to be imported). And if you’re always buying tubs of ice cream, boxes of chocolate and two-litre bottles of soda, make it a goal to cut back on those items. It’ll save both your money and health.
- Cool off on the “guilty pleasures” – Alcohol, cigarettes, lottery tickets – are “necessary” purchases for some people. However, the habitual weekly purchase of these items add up to thousands of dollars in expenses over the course of a year, and a loonie can make these “goods” more expensive. That’s why it doesn’t hurt to cut back on these expenses. Again, it’s a choice that can safeguard your money and more importantly, your health.
- Don’t splurge – Those shopping sprees for designer shoes, top-selling video games and collector’s items (ie. paintings, watches, antiques) are best reserved for stable times. With that said, you should make the practice of splurging a habit anyway. But as the prices of these items rise in poor economic times, you should have an even greater motivation to stay away from overspending on them.
You Don’t Need a Miracle, Just a Plan
For you to remain comfortable during this economic downturn, you must brace yourself for impact. In other words, preparation and planning are key. If there’s anything that history has taught us, it is this: humans can survive just about anything if they are prepared for it. So the weak Canadian dollar shouldn’t scare you per se, but it should turn into a smarter shopper and a sharper decision maker with finance. It has been said that adversity builds character. If you look at our economic situation from this perspective, you may realize that the weak Canadian dollar will turn you into a more financially savvy individual. And you’ll feel unstoppable when things pick up again.