On Sept. 23, the Canadian dollar traded as low as 73.69 cents U.S. This is quite the drop from a high of 80 cents U.S. earlier this year.

I’ll explain how the falling loonie could affect your personal finances, and share some helpful tips for making your money go further.


The World Bank recently published a report indicating that Canada, along with the rest of the world, could be headed towards a global recession in 2023.

This, combined with the falling value of the loonie, could have some negative effects on the everyday finances of Canadians.

Higher food prices

If you’ve visited your local grocery store recently, then you’ve surely noticed that the cost of food and other essentials has increased due to inflation. As the value of the loonie drops, buying power also decreases, which could result in spending more money on groceries. Be sure to budget accordingly to accommodate for this.

More expensive foreign products

While Canada is certainly a manufacturing hub, many of the products that we use daily are imported from overseas. According to the Canadian Encyclopedia, here are some of the most common Canadian imports:

  • Car parts for European or Asian import vehicles
  • Electronics, such as phones, laptops, and TVs manufactured overseas
  • Fuel and oil imported from overseas
  • Plastics

When the value of the Canadian dollar falls, we’re not able to buy as much with it. This means that everyday items and essentials may increase in price, which can have a very tangible effect on our monthly account balance.

Other imported products that could become more expensive are home goods and clothing.

Fewer shoppers and clients for small businesses

If you own a small retail store or a service-based business, you could see a reduced number of customers and clients.

Additionally, as a small business, you’ll likely find that your daily operating costs are increasing as office supplies and other essential business items become more expensive as well.


Now that you have a better idea of how the falling loonie could affect your finances, here are some practical tips that can help you stay on top of your money.

1. Pay off high-interest debt quickly

If you have a loan or a credit card balance with a variable interest rate, then you should focus on paying down your debt as quickly as possible. If your lender or credit card company decides to raise your interest rate, then you could end up having to pay more money as a result.

The more money you pay towards your principal balance now, the less money you’ll have to pay towards interest in the future.

2. Purchase essential groceries in bulk

Buying essential groceries in bulk is always a good way to save money. Today, however, I’d argue that it’s more important than ever. Make use of your freezer space to store perishable foods and stock up on non-perishable items such as canned goods.

The amount you’ll save by shopping with wholesale grocery suppliers far outweighs the annual membership costs to visit these stores.

3. Hold off on major expenses

As essentials become more expensive, I recommend holding off on major expenses for now. It may be tempting to buy that new car, go on that Caribbean vacation, or renovate your kitchen. However, making these purchases could negatively affect your ability to afford the more important things.

4. Cut back on non-essential purchases

Aside from avoiding major expenses, there are other ways Canadians can save money as their expenses increase, such as:

  • Eating at restaurants less frequently
  • Finding free sources of entertainment, such as hiking on your local trails, getting a library card to borrow free books and DVDs, or listening to podcasts
  • Getting rid of expensive memberships
  • Dropping lawn care or snow removal services
  • Thrift shopping instead of purchasing new clothes


The decreasing value of the loonie is undoubtedly going to affect most Canadians’ wallets. As long as you’re smart with your money, save more than you spend, and focus on the essentials, you should be able to stay on top of your personal finances.

Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.

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