5 Ways to Navigate Inflation
Inflation has increased the costs of goods and services over the last few years, impacting consumers nationwide. According to the U.S. Bureau of Labor Statistics, the current annual inflation rate is 2.9%. That said, there are ways you can manage the impacts of inflation to help save you money. Below are some methods to consider.
Review Your Budget
Inflation or not, it’s wise to periodically review your budget, as your financial goals and spending habits may change over time. When inflation hits, it’s pertinent to reconsider your spending habits as you see fit. Eliminate any expenditures you don’t deem essential. It’s also smart to pay attention to recurring payments on your credit or debit card statements, as prices for services or subscriptions may have gone up without your knowledge.
Assess Spending Categories
Similarly, it’s important to identify which of your spending categories have increased the most and find ways to lower them. For instance, if your grocery bills have risen, opt for more cost-effective foods or generic brands. It may also be a wise idea to meal plan before hitting the grocery store, that way you’re not purchasing items you won’t later use. Higher energy costs are tied to inflation, so it might be a good time to perform an energy audit. If you spend the most on gasoline, for example, try organizing a carpool or grouping your car trips.
Shop Smart
Identifying which spending categories have increased the most and shopping smart go hand-in-hand. As stated, purchasing cost-effective foods or organizing a carpool can help combat the impacts of inflation. Likewise, buying used or secondhand goods can also help you save. The price of new items tends to increase during times of inflation, so the market for used and pre-owned goods may increase as a result. That said, an easy way to make some extra cash is by selling unused items. Poke around in the attic and see what belongings of yours you no longer need, you may be surprised at how much money you’ll make selling them!
Pay Off Debt
Paying off debt, especially credit card debt is crucial to financially navigating inflation. Although it can be tempting to rely on credit cards when prices begin to climb, avoid over-relying on them. The Federal Reserve tends to raise interest rates during times of inflation, making it more difficult to pay off new and existing credit card debt. Again, it’s wise to review your spending habits to ensure you’re getting the most bang for your buck.
Collect Interest on Savings
If you work for your money, your money should also work for you. A simple way to combat inflation is by collecting interest on the money you already make. High-yield savings accounts, like Gulf Winds’ Money Market accounts, can help outpace the effects of inflation by earning interest quicker than traditional savings accounts. They’re also great for emergency savings in the event of future economic downturns. Similarly, certificates of deposit (CDs) can also help you collect interest, and often at a quicker pace than savings accounts. Gulf Winds offers several CD options, including a 7-month CD with an APY of 4.95%. Our CDs are also compounded monthly.
While nobody can stop the effects of inflation, there are ways you can navigate it without taking a hit to your wallet. While inflation rates have slowed, you never know what tomorrow could bring. Knowing how to navigate inflation is critical to your financial well-being.
Hunter Morrison
About Hunter Morrison
Hunter has freelanced for various print and radio publications across Northwest Florida, including The Bay Beacon, Navarre Press, Inweekly, Crestview News Bulletin, and WUWF. He was also the Editor in Chief of the University of West Florida’s student newspaper, The Voyager. In 2023, Hunter moved to Kenai, Alaska to take up a news reporting position with KDLL Public Radio. For fun, Hunter enjoys cross-country skiing, hiking, photography, thrifting, traveling, and looking for the best Thai food around.