Inflation continues to reach levels not seen in decades in the United States, driving up the price of everyday items and putting a financial strain on families.
The consumer price index, which measures changes in prices for common goods and services, jumped 8.5% in the last year as of March, the Associated Press reported Tuesday, the biggest year-over-year increase since 1981. That means more sticker shock for people buying typical items such as gas and groceries, especially for middle- and low-income families.
Still, personal finance experts say, there are steps you can take when going to the grocery store, the gas station and more to try to combat inflation.
Here’s what to know about the current state of inflation and some tips for dulling the impact of inflation in your day-to-day life:
What is inflation? What causes it? And how do we fix it?
Inflation is defined by the Federal Reserve as “ongoing increases in the general price level for goods and services in an economy over time.” Essentially, it means that the prices for multiple things are going up at the same time and continuing to go up over time.
It can be caused by many things, and the recent uptick has been attributed in large part to supply chain disruptions caused by the COVID-19 pandemic and Russia’s invasion of Ukraine.
Economists expect the Federal Reserve will raise interest rates this year in an attempt to slow inflation rates by curbing borrowing and spending, the Associated Press reported.
And the Biden administration has announced multiple steps to try to lower gas prices, including releasing oil from strategic reserves and waiving an environmental rule.
How can individuals fight inflation?
Personal finance experts have offered some recommendations for addressing inflation in your daily life in order to try to dull the impacts on your family’s bottom line, including:
Shop around
From gas to groceries to car insurance, shopping around can help you find the best deal, and the internet has made it easier than ever to do.
Sites such as GasBuddy let you see the lowest prices for gas in your neighborhood without having to drive around wasting gas. And sites such as thezebra.com let you compare prices on bigger ticket items, such as insurance premiums.
If you have different grocery stores to choose from, you can use the stores’ apps or websites to compare prices on items from your list and check out sales before heading out and often “clip” virtual coupons and join free savings programs.
Shop second-hand
Thrift stores and consignment shops often offer good deals on gently used items including clothes, furniture and electronics that are often much more expensive when bought new during times of high inflation.
There is a rundown available of area shops from the city’s Visitors Authority to get started.
Consider delaying big-ticket purchases
Times of high inflation may not be the best time to get a new car, upgrade your TV or renovate your kitchen when not necessary, financial advisor Neil Gilfedder told CNBC. Instead, it may be worthwhile to keep an eye out for sales and falling prices before acting.
Consider if buying in bulk is worth it
“Big box” stores such as Costco often offer good deals on gas and “per unit” prices for staple items bought in bulk, but you need to factor in the cost of a membership. Before joining up, Reviewed.com recommends, think about what items you’d actually buy in bulk for your household and decide if those cost savings will exceed the cost of a membership.
Review and reassess your auto-drafts
Auto-drafts can be a convenient way to make sure you’re not late on paying a bill, but they can also make it easy to forget that you’re paying for something, financial planner Dawn Dahlby told the Minneapolis Star Tribune. If you’re looking to tighten your budget, it’s a good idea to review your bank and credit card statements to see what you’re being charged for and decide if that gym membership you’re not really using or streaming service you signed up for just for one show is worth paying for.
Ask for a raise
Asking for a raise can be nerve-wracking, and it’s not feasible at every job. But if you can, it’s a good way of helping keep your wages in line with the cost of living, LendingTree economic analyst Jacob Channel previously told The Charlotte Observer. You can find some tips for starting the conversation at indeed.com/career-advice/pay-salary/guide-how-to-ask-for-a-raise.
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(Observer reporter Hannah Lang contributed reporting to this story.)
