This year, rising prices have cost consumers their confidence in the economy.
As we have all witnessed at the gas station and grocery store, prices are skyrocketing due to inflation. In fact, prices jumped in November to 6.8% over the previous year, according to the latest consumer price index data.
The glum outlook specifically hits older Americans and consumers who live paycheck-to-paycheck. These groups are having a challenging time recouping from the slowly recovering post-pandemic economy.
And while these groups bear the most significant burden of the rising costs, they aren’t the only ones feeling the stress. According to Pymnts.com, 81% of consumers now say they are highly concerned about inflation.
So what can we do to ease the burden and not exacerbate our financial situations? What specific things should we be doing with our money at a time like this? Read below to learn.
What should you do with your money during inflation?
- Consider investing. Instead of growing your savings account, experts say to grow your investments. Think gold, stocks, bonds real estate and possibly cryptocurrency. Why? The cash in your savings accounts likely isn’t earning interest, and everything you buy is increasing in price. To avoid degrading your purchasing power, make sure you’re invested. Experts recommend investing in a diverse portfolio with investments that will increase with inflation, like bonds and Treasury Inflation-Protected Securities (TIPS).
- Avoid buying a car. Unfortunately, it’s time to pump the breaks on buying that shiny new convertible you’ve been dreaming about. If you have taken a test drive in the last couple of months, you know how high car prices are right now. Waiting on large purchases is probably the best thing to do. Although auto loans are lower than usual, the prices of vehicles have skyrocketed over the past year. Inflation on used cars is even worse – up 31% from last year. Experts highly suggest sticking with your current vehicle if it still gets you safely from point A to point B every day.
- Eat your veggies. If your New Years Resolution is to eat more veggies, this tip will benefit you. Not everything you buy at the grocery store is impacted by inflation. Most of the increases consumers notice are due to animal-derived products. So, experts say to swap out beef for more plant-based meals. Bon Appetit!
- Get rid of those unused entertainment subscriptions. It’s a great time to take a good, hard look at what you’re overspending on and cut out the clutter. For example, if you purchased a monthly streaming service to watch one show back in the spring and haven’t used it since, it’s time to part ways. In a time when necessities like food and gas cost more, it’s essential to prioritize.
- Buy, don’t rent. Buying real estate can benefit you in the long run because it historically does well during periods of high inflation. The value of your home will likely increase, and if you’re renting, this means your landlord can charge more for rent. If you’re saving up for a down payment on a house, experts recommend getting a side gig or selling some personal items to speed up the process.
Contact your provider lawyer to discuss your consumer finance needs.
Stress is much higher than usual as the economy slowly and stubbornly recovers from the pandemic and inflation surges upward. And as inflation rises, so do consumer finance-related legal issues. Make sure you’re legally protected and consult with your provider lawyer for any questions or problems that arise during this time.
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