As of late, figuring out how to deal with inflation right now has been a difficult financial topic to ignore. We’re seeing price hikes on almost all of our everyday needs like food, housing, transportation, and utility costs. Even with rising wages, our budgets can still feel tight with inflation added to the equation. This is exactly what inflation does to our pockets. Where your not necessarily losing money, but your money is losing its purchasing power. So what we think we can afford today, might not be what we can afford tomorrow. Which can cause some financial stress issues to your life as a whole.
Normally we see inflation affect our bottom line between 2-3%, which is a sign of a healthy and growing economy. But in 2021, inflation hit record highs that we haven’t seen in over 30 years. Leading everyone to wonder, how do you actually deal with inflation?
Long-Term Inflation Advice
The popular financial advice is to invest their money instead of saving it. This will allow you to hedge your finances against inflation, since you’re money can grow with the market instead of earing pennies in a savings account. This is great advice if you’re looking at your retirement or any long-term investments that are over 10 years out. But this doesn’t necessarily help people who are struggling right now to just put food on the table.
So what do we do and how do we deal with inflation right now?
How to Deal with Inflation Right Now
Approaching inflation in the short-term is a completly differnt approach compared to the long-term. It’s not necessarily about the financial changes you have to make, but more of the behavioral changes that we have to do. When everyday items are costing more money, you have to make adjustments to your day-to-day spending. So, here are three ways to help you deal with inflation right now:
1. Cut Wasteful Spending
One of the biggest changes you can make to your budget and daily habits is to cut wasteful spending. On average, a typical American throws out $53 worth of spoiled food a week. That equals out to a little over $2,700 a year. This weekly habit is honestly a waste of money and food. By being more cautious about our waste can help us create better spending habits that can save us a ton of money.
2. Check Your Budget Weekly
During times of price hikes, you have to be more entwined with your budget than ever. Checking your budget weekly will help you gauge the areas of your budget that you’re overspending at. This will allow you to make quick adjustments to your spending, if needed. Now, this doesn’t have to be permanent, but during times of inflation, it’s helpful.
3. Re-Evaluate Your Goals
I don’t want you to get the wrong impression here. I am not saying to cut your goals or to throw them out the window. What I am saying is to be more flexible with the time frame you gave yourself to achieve your goals. Sometimes pushing a big goal out an extra year isn’t a failed goal. We tend to forget that an accomplished goal is still an accomplished goal no matter how long it took you to achieve it.
A big lesson that I learned during this period of inflation, is that the best way to deal with inflation is to invest in yourself. Increasing your income is a powerful way to balance out higher prices. But this can’t be an option if you don’t to invest in yourself, your education, your skillset, and your value. The more valuable you become the more you can charge for your value. This is an additional tip that has helped my family deal with inflation during these times.
- CPI surges 6.8% In November 2021 – CNBC
- Why Prices will Keep Soaring in 2022 – CNN
- Top Economic Challenge of 2022 – Washington Post