Planning matters

How to Lessen the Sting of High Inflation

With inflation at the highest level we’ve seen in 40 years, and continuing to be stubbornly persistent, you’ve probably noticed that your dollars just aren’t going as far as they used to. It wasn’t as apparent when prices crept up 1-2% per year, but now we’re all feeling the impact when buying everyday goods and services such as food, furniture, apparel, and transportation. It has many of us wondering if rampant inflation is here to stay, and if so, what can we do about it?

The silver lining is that there is something you can do to reduce the pain of inflation on your household budgets and wallets.

In times like these, it’s smart to go back to common wisdoms:

  • No new financing, if possible. With interest rates likely rising again this year, new purchases will cost more if financed over time.
  • Don’t fall into a debt trap. Prioritize and pay off high-interest debt, especially if rates are variable.
  • Postpone non-urgent purchases. If it’s not immediately necessary, you may want to wait for a better price down the road.
  • Reduce transportation costs. When it comes to saving at the pump, start with your own habits—keep up with your car’s maintenance, stick to the speed limit, consider carpooling, and be strategic about trips.
  • Use less energy at home. Adjust your thermostat down. Check windows and doors for leaks, make the switch to energy-saving light bulbs, and unplug chargers when not in use. Also make sure to regularly clean and replace filters.
  • Watch what you eat. Find ways to eat out less often by planning for meals at home week to week. Become a smart shopper – buy in bulk, switch brands, use reward cards, take advantage of coupons, watch for sales, buy used, time purchases off-season, etc. Many grocery-store loyalty programs and warehouse-club memberships award discounts as well.
  • Review subscriptions. Now is a great time to reevaluate streaming services and other monthly bills. Are you using them enough to justify the cost? Do the same thing with phone, internet, health clubs and insurance providers; you may be able to switch to a cheaper alternative or negotiate a cheaper rate.
  • Keep on keeping on. Inflation erodes purchasing power, so keeping your long-term funds (those you won’t be tapping for over 5 years) in a savings account is not a good idea! Keep investing – while your money may currently have less purchasing power, playing the long game has historically paid off for investors.

You may have other ideas, too – what other ways can you think of to stretch dollars further? Small changes can add up.

Need Help?

If you’d like to talk through your individual situation, please contact your Financial Planner. We’re happy to help you look at your options and make sure your plan and your portfolio are aligned with your long-term goals.