Finances FYI Presented by JPMorgan Chase
You’ve probably noticed that your grocery bill is higher than it used to be lately. Or maybe doing some spring clothes shopping is more expensive than you’d like. Price hikes are everywhere right now, and the culprit is inflation.
Inflation is an escalation in consumer goods prices caused by factors like production shortages, supply chain challenges, or international conflicts. Right now, all three of these have combined to create historical inflation. When it happens, inflation is difficult to combat. Prices rise for reasons that are usually well beyond our control, and the increases seem to be everywhere.
But there are a few things you can do to protect your pocketbook during times of inflation. They range from basic budgeting to renegotiating rates for your services. We can’t escape inflation entirely, but we can ease its impact on our finances with some strategic thinking.
Some expenses, like groceries and gas, are non-negotiable. But when it comes to other purchases, especially significant ones like a new television or car, think about putting off the purchase until inflation begins to ease. In general, it’s true that prices rise slowly over time. Still, dramatic inflation, as we’ve seen lately, is rarely permanent. You could save hundreds of dollars if you can wait to make that big-budget purchase on an optional item. Plus, the longer you wait, the more money you can set aside for such a purchase. That may allow you to buy a nicer model or take out a smaller loan by making a larger down payment.
Ask for a Price Break
This trick works better for services you’ve used for a long time or areas of your financial life where you might be paying interest. For example, you won’t be able to negotiate the cost of your groceries. But you can reach out to service providers like your insurance company, cable provider, or cell phone carrier and ask if any programs or rate breaks are available for loyal customers. Another good place to look is the annual percentage yield on your credit card. Call your servicer and ask for a lower rate to save on interest costs so that you can apply that money elsewhere. The worst that can happen is to hear “no.” So, there’s no harm in trying.
Update Your Budget
The best place to start when saving money is with a good old-fashioned budget. Even if you already have one, you probably made it before inflation started to rise. To get a grasp on your spending in the current climate, take a new look at your budget and record the changes in your expenditures. Then, adjust your allocations accordingly, and reduce unnecessary expenses to make up the difference.
Take a Walk
One of the most commonly purchased things with the most volatile pricing is gasoline. Gas prices are very high right now, and filling up the tank on a large car or pickup can be an expensive undertaking. To help with this, consider walking or biking to nearby destinations and combining trips when running errands. You can also look into public transportation or carpooling in your area to reduce individual gas usage on your commute. As a bonus, this tip isn’t just good for your wallet; it’s helpful to the planet, too.
Inflation is an unfortunate fact of life in our interconnected economy. There’s little we can do as individuals to prevent it. Still, you can mitigate its impacts with some simple strategies that allow you to keep as much money in your pocket as possible until prices start to fall again.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.