You Can’t Stop Inflation But You Can Counter Some of the Effects
Most of us are aware that the prices of nearly everything have increased, from gas to food to entertainment. The pandemic is the main culprit, as many industries destabilized and were forced to adapt, particularly to shipping delays. Not only that, but many governments experienced the stress of providing money to help their citizens. The more money that enters the markets, the lower its value gets.
We’re not only living in the effects of inflation. Some believe that we’re in a steady state of hyperinflation until the world finally gets back to a sense of normalcy.
What to Do During Inflation
While the scenario we find ourselves in is unavoidable, it doesn’t mean that it’s not manageable. Smart spending is all about knowing what you can buy and what to avoid to maximize your cash value. To do that, we need to understand where inflation is hitting the hardest and adjust our spending there accordingly. While you may feel the need to buy if it fits your lifestyle, holding back can save your finances.
Automobiles
One of the most significant jumps in prices is in gas and car prices. With most of the world settling back to normal thanks to vaccinations, the demand for these items spiked. Now you’ll see price increases anywhere from 10 to 60% on automobiles and related expenses.
The main reason for this is that manufacturers weren’t prepared for the sudden spike in demand. Production of both gas and vehicles slowed down as the prices did, and manufacturers have had trouble recovering.
That being said, like most shopping endeavors, the secret here is to check prices. If you want to save money, you’ll need to take extra time to compare prices from each dealer. It’s even easier now as there are free resources out there that can provide you with a vehicle’s value. Now you can get a car without worrying about any unwanted surprises.
For gas, it’s about trying to find the best prices for gas that fits best for your vehicle. If it means switching to another brand, that might be the best move to avoid draining your bank account. Similar to buying vehicles, you can also shop around for the best gas prices. If you have multiple gas stations in your area, drive around and price-compare every now and then. You might find that one station is selling it for a significantly lower price than another. Though keep in mind that even a few cents less adds up in the long run.
Appliances and Electronics
Another development that occurred because of the pandemic was a shortage of appliances and electronics, and the effects are ongoing. For the next few months, people will have to pay higher and wait longer for the items they need at home. It includes all household appliances like refrigerators, washing machines, and the like.
Prices will likely stabilize, but prices will not be the same as before the pandemic. You will need to take some time to compare and contrast. Figure out what features you want the most and those which aren’t a priority. For example, opting for a standard finish on your appliance can save you hundreds or thousands of dollars.
You may also seek out online stores and other independent retailers that offer lower prices than what you see in big box stores. You might find a new brand with more competitive prices.
Housing and Rentals
With more interest in the virus than buying a new house, prices dropped. When it did, prices hit lows across different parts of the country. The renewed interest in home buying across the nation has made this into a seller’s market – they bought the houses for low prices and are now selling them for much higher. Unfortunately, that means buyers are hurting from this.
With the price increases also comes a rent increase. Many landlords were affected by the lockdowns as they did not collect to alleviate the financial pressure on their tenants. Most of the country has now returned to collecting rent, which has increased to account for inflation.
The increase in interest rates has also affected house prices. Since mortgage loans will be more expensive, it has inadvertently increased the value of all homes with them.
No matter the cause, for those looking to buy their dream home, one of the ways to go about it is to find a fixed-rate deal. You can expect to pay the same amount for the house over a long period. Those who go for a more dynamic payment approach may find it very expensive with increased interest rates. The alternative is to wait things out for now, but that may take time buyers don’t have.
As for rent, the same tip from earlier applies – shop around. Find places that cost a reasonable amount each month. If you’re finding that a place is too expensive for you, you may want to consider downsizing.
Utilities
In recent months, providers of all utilities have been raising prices in response to everything else increasing. Back then, they had very lenient policies, expecting that most people would not accommodate. Today, whether it’s the internet, telco, gas, or electricity, everything’s increasing.
For saving money, you may start seeking out lower-cost plans that can lower your monthly spending. You may also try to look for bundles, promos, and discounts you can take advantage of right now.
It’s also probably the best time to look into all your monthly subscriptions. You may find that you’ve been spending money on services that you no longer use.
Groceries and Essentials
Probably one of the most impactful increases these past years has been in the price of food and essentials. All goods have increased at least 6% since late 2020. Many have noticed how their usual grocery trip ends up paying more than usual.
The positive news with groceries is that the buyer has the most control. There is always an affordable option than what you’re used to right now. If you love buying steaks, you may want to buy less and opt for cheaper meats. Try to buy whole meals that involve more vegetables and other lower-cost proteins.
Also, you can try to seek out the best deals possible. Look for bargains, sales, and promos that can help you make the most out of your trip. Discounts and packages are always available in grocery stores. You may even want to venture into couponing or rewards card systems.
If a non-perishable item is on sale, you may want to stock up. Having many items bought at a lower price can set you for months or even a year. With prices expected to continue to go up in the year, it might be the best move available.
Another option is to check cashback cards. Many credit cards provide cashback, and some apps give you a percentage return. Even small amounts can add up, and you can use the money you save for other important things. Credit cards can offer anywhere from 1-6% cashback, depending on the terms and conditions.
Entertainment
Life doesn’t have to be put on hold. In fact, while inflation is high, and affordable purchasing opportunities may be limited, there are many things you can do to pass the time in a fun and healthy manner.
Instead of attending a sporting event or concert, or any other expensive-to-attend performance, you can gather some friends to stream the event with, with each person chipping in, if it’s an option. These opportunities have been accelerated during the COVID pandemic, and many will likely stick around.
Heading out to the park, or to a favorite close-to-home trail can help keep your spending down and keep your fitness up. You can do these things solo, or with friends and family, and depending on where you’re located, the options can be fairly unlimited. If you want to seek out more distant destinations, but are concerned about the expenses, look for someone who’d be willing to split the expenses.
Seek Out Better Opportunities
Higher prices due to inflation can also lead you to opportunities that wouldn’t otherwise be available. Now it’s reasonable to ask for a pay increase because prices of goods have gone up. Historically, inflation also affects benefits, and you may see lower taxes and bigger refunds.
Aside from being strategic with your shopping, make the most out of the current environment. During the first year of the pandemic, when many industries collapsed, some flourished. Every year, new demands and niches are waiting for discovery. Those who switch to high-demand fields can experience much better working conditions.
However, it does take time to apply. You may not feel like you’re doing much with your shopping right now, but it will matter. You can at least try to maintain the same level of spending you’re used to before inflation hits. It requires a bit more investment, but it’s something that can help you fully utilize your money’s potential.
Conclusion
Inflation has affected most buyers, but that doesn’t mean you can’t overcome its effects. By making smart spending choices (or finding an alternative to spending money), you’ll be able to save each month and live within your means. You might even find yourself in a better position that when inflation wasn’t such a concern.
