After seven years of lying still, the Bank of Canada shook up Canadians and increased interest rates from .50% to .75% in July of 2017.

On the morning of Wednesday, September, 6th, the Bank of Canada announced its second interest hike, raising it an additional quarter of a percent to 1%.

With the second increase occurring just a month and a half apart from the first, many financial advisors are attempting to make sense of where the Bank of Canada is headed with its swift and recent moves.

Photo Credit: WikipediaBank of Canada

"I mean that's more of a surprise that they are feeling the need to do that so quickly after their previous rate," said Robert Oleksyn, investment advisor with Valley First.

While the first interest hike may not have sent a warning bell to Canadians, Oleksyn believes more people are taking note of the second increase.  

"It's going to be a bit of a bold wake up call because it was kind of a surprise," said Oleksyn. "Kind of like a bucket of cold water on you when you're sleeping."

While there are many theories as to why the Bank of Canada has made these bold moves, Oleksyn believes it's more of a reactive move than proactive.

Photo Credit: Valley First

Back in July when the first increase was made, the Bank of Canada hinted that more news would be unveiled by mid-October of 2017 and that Canadians might see inflation hit 2% by the middle of next year. (Source: Bank of Canada).

"The economy's growing and rates probably still are going to keep going up," said Oleksyn.

He believes that Canadians are still in debt and still adding to their debt, which could lead to many Canadians being called to account for living beyond their means.

"We keep seeing survey after survey where financial institutions or survey companies are asking Canadians about how much they're borrowing and they still keep increasing it," he said.

So what can Canadians do to protect themselves as rates start to climb with no word of them dropping any time soon?

"They really have to review their financial objectives and their financial plans with their financial advisors," he said.

According to Oleksyn, it might mean hunkering down for many Canadians and adjusting to a lifestyle of living within their means.

"How many people are living paycheque to paycheque? Can they afford an extra quarter of a percent mortgage rate?"

For Canadians in the real estate market, it means you'll be paying more to borrow.

"Now that should drop off the number of people that are borrowing, but if you're paying all cash, it really doesn't matter," he said. "Say your interest rate's 3%: if it's gone up over half a percent now, really you can borrow about 10% less."

Oleksyn said there are few ways you can protect yourself in changing times.

The first is to lock in rates as to what you pay for your mortgage.

But the main thing, he suggested is knowing you have some cushion for the unexpected things in life.

"See your financial advisor and review things – see how it affects you. I certainly think it's going to make people live within their means a little bit sooner but it's hard to say," he added.