Many are noticing the current rise of prices for gas, groceries, and other commodities while feeling a pinch in the budget. If you are finding that your money is not stretching as far as it did even a year ago, you might be searching for ways to navigate inflation without suffering financial losses.
Inflation can silently sneak up on you because a raise in price for any particular item can be small. When a variety of necessities undergo rate changes, overall costs quickly stack up. No matter what age you are, it can be scary, especially as many also fear a recession. Instead of getting caught up in panic and uncertainty, focus on making plans for the future—Portage Bank can help.
What is Inflation?
Inflation is a general increase in the money supply which leads to an increase in prices, resulting in a loss of purchasing power. This means you need more money to buy the same amount of goods. The loss of purchasing power impacts the cost of living, which often leads to an economic recession.
Portage Bank has some guidelines and tips to help you stay ahead. Whatever age you are, there are ways to be smart with your money and create a sound financial plan for surviving inflation.
Create a Budget
Start by tracking costs for the essentials you use regularly, and be aware of the rate of change. That way, you can plan around this and revamp your budget to address your current needs. If one store charges higher prices, try switching stores or looking for low-cost alternatives.
It also might be helpful to try monitoring price trends by keeping tabs on websites like The Economist’s Inflation Calculator or numbeo.com.
Reassess Financial Goals
Cut or reduce expenses and try to identify a few budget items you no longer need. Creating a budget can help motivate you to make wise decisions with your money. For example, the whole family can make a creative meal at home together instead of dining at an expensive restaurant.
Investing During Inflation
By investing in a Money Market Savings Account or savings accounts with Portage, you can protect yourself from the risks associated with inflation by providing some stability in your investments. In MMSA’s, your money is insured and protected and will yield a higher return.
Money Market accounts and Savings Accounts are also outstanding, low-risk options for retirement planning by minimizing losses while preserving your purchasing power over time.
Teach Your Children
Inflation can be a good time to teach kids about saving money. When shopping with your child, explain how much things cost so they understand the difference between spending $3 on an item versus $6 on an item (and ensure they know that’s not just because of inflation!).
Help them create a budget of their own. Kids and teens often are surprised at how fun it can be to watch their money grow over time.
More Concerns?
If you would like help navigating inflation by creating a sound financial plan, Portage Bank can help. Please contact us with any questions, and let us help you think and plan strategically so that inflation will not detract from your financial goals.
