If you’ve watched the news lately, you’ve probably heard something about inflation, along with all the negative impacts it’s going to have on your wallet. While it may sound complicated, inflation just means that the costs of goods are going up – and your dollars are worth a bit less.
There’s a lot that’s out of your control when inflation hits, but you don’t have to let it sidetrack you from your financial goals. Here are three things you should know about inflation – and three ways you can keep your financial goals on track.
1. Everyday costs are going up
You’re not just imagining that milk and bread cost more these days – rising costs typically hit every aspect of your wallet, from gas to your groceries. An increase of a few cents here and there can put a dent in your everyday budget, so it’s important to take into account these price increases.
Take action: Tighten up your budget. If you’re in a bind, this could be a great time to pare back on expenses such costly subscriptions or name-brand groceries.
2. Shortages are playing a role
We’re still feeling the effects of the COVID-19 pandemic on our supply chains, and shortages in everything from lumber and housing to cars and computer chips are driving up prices everywhere. Add in people having extra money from stimulus checks and staying home, and you’ve got money flowing through the economy that’s driving prices up.
Take action: You don’t have to fall into the trap of panic buying just because you see shortages. Whether you’re looking to purchase a vehicle or make a renovation on your house, it could be best to hold off on big purchases until things level off over the coming months.
3. It’s a normal part of financial trends
Even though inflation is a pressing topic for many people these days, it’s not a new concept. Prices are always increasing over time – it’s the reason your parents could buy more with a dollar than you can today. While financial experts aren’t sure how long the current season of inflation will last, it’s important to remember that our current situation likely won’t last forever.
Take action: If you’re secure in your emergency savings and have paid down your debt, now could be a good time to start working on your investments. Inflation means that you’ll need more money for college or retirement, so it’s best to start saving as soon as you can!
Need help creating a financial plan? When inflation hits, it can be challenging to pursue your long-term financial goals. With Strong Tower Consulting, you can create a financial plan that will help you eliminate debt, increase your savings, and reduce your financial stress.
Ready to experience financial freedom? Request your FREE 30-minute session with Strong Tower Consulting today!