The Canadian dollar has seen a sharp spike up in recent months, as we’re seeing it get closer to par again. That means opportunities to save money!

Some of these opportunities will happen automatically, as in lower prices on goods you buy that are imported into the country, lower prices on some foods, etc.  Others you will have to think about and decide if it’s worth it for you to explore.

Here’s some ideas to consider:

Vehicles

It’s again becoming very attractive to go through the hassle of finding a vehicle in the U.S. and importing it back to Canada.

Vehicles are generally much cheaper in the U.S. to begin with, so a strong dollar just makes it even more so.  I did this in 2007 when our dollar was above par and saved over $10k, so this can definitely be a huge savings.

RedFlagDeals.com has a large forum post on how to import vehicles, I found that very helpful for handling the logistics.

Another similar option to save money, but with less hassles, is to buy a U.S. vehicle from a dealer in Canada that has already been imported by them.  Your savings won’t be as large, but there are some other benefits, such as trade-in and financing options.  I did this with another vehicle I just purchased and saved about $7k compared to a Canadian-originated vehicle.  I could have saved 2-3k more by finding a vehicle in the U.S. and importing it myself, but I didn’t want to take the time to do so this time.

Shopping

Crossing the border to shop is not only becoming attractive because of the dollar but also because of the economic situation there, which appears to be worse than here.  I was there recently and malls I visited were shockingly empty.  Stores were offering deep discounts on many items.

Don’t just think of consumer goods, either. If you live close enough to the border, it can even be worth it to cross for groceries and to fill your tank.  I know people who do big stock ups on pantry goods, bring jerry cans for extra gas and have work done on their vehicles while down there!

Of course, you don’t need to physically visit the U.S. to shop there, most things can be bought online and shipped here.  Now is a great time to get back on sites like ebay and Amazon to find deals.

Investments

Whenever the Canadian dollar starts climbing, I start thinking about increasing my foreign investment exposure.

This time, with the combination of a high dollar and world stocks prices that are still beaten down, I’m even more eager to buy investments abroad.   A stronger dollar means you buy more of your investment for less money.  If the dollar later drops, your investment value goes up, even if your original investment doesn’t move in price.  Likewise, if the dollar keeps rising, it will devalue your investment, so be aware of the risks.

I consider this a long term investment, that I just happen to be picking up when the dollar is at a level that I don’t believe will be sustainable long term.  I will usually use periods when the dollar is strong to exceed my planned allocation for foreign investments and then re-balance back to my plan when the dollar goes down again.  Keep in mind this might happen over many years, so have a plan and a long term focus if you want to try and time the market in this way.

Finally, remember that the foreign content limit restrictions on RRSP’s were removed a while back, so you’re free to invest wherever and however you choose.  There are also no limits on Tax Free Savings Accounts.

Travel

A rising loonie also means that travel outside the country becomes cheaper.

Everything from hotels to car rentals to meals out costs less.  It’s also now even more attractive to consider flying out of a U.S. airport to your destination, as your flight will be in cheaper U.S. dollars, plus the usual benefits of lower prices and taxes, compared to Canada.

Package deals also generally get cheaper, even if they are priced in Canadian dollars. This is because the travel dealer you are buying from has reduced costs due to the dollar and these get passed on to customers (if they want to remain competitive and stay in business!).

Does anyone have any other ideas on how to benefit from the dollar? Feel free to share!

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