If you’ve been keeping an eye on the news, you may have noticed increasing talk of inflation. It’s a word that has been thrown around quite a bit lately, but what does it actually mean? Inflation refers to a rise in prices on goods and services over time, causing the purchasing power of our money to decrease. This can lead to some difficult financial situations for families, workers, and anyone trying to get by. In this blog post, we’ll explore what inflation is, how it affects us, and what we can do to continue to pay off debt despite the struggle.
Inflation in 2023
Inflation can be caused by a variety of factors, including an increase in demand for goods or services, a decrease in the supply of them, or a decrease in the value of currency. When prices increase, it can be difficult for low-to-middle-income families to afford everyday necessities like food, housing, and healthcare. This can lead to a decrease in quality of life for those affected, as well as negative effects on the economy as a whole.
So, what is inflation looking like in 2023? Unfortunately, the future isn’t entirely clear. However, it’s important to note that inflation has been steadily increasing in recent years, with some experts predicting that this trend may continue. This means that families will need to be more vigilant than ever when it comes to saving and budgeting. It might mean cutting back on non-essential purchases, finding ways to reduce debt, or even considering a second job to make ends meet.
Paying Off Debt Despite Rising Inflation Rates
For those who are already struggling to pay off debt, inflation can be especially challenging. As the cost-of-living rises, it can become increasingly difficult to keep up with loan payments, credit card bills, and other debts. But there are still options. Consider talking to a credit counselor or financial planner for help creating a plan to pay down debt. It might also be worthwhile to explore options like debt consolidation, refinancing, or other debt relief programs.
Saving in 2023
Another thing to keep in mind when it comes to inflation is the importance of saving. Building up a strong emergency fund can help ensure that you are prepared for unexpected expenses or job loss. When prices rise, it can be hard to make ends meet, but having a cushion of savings can help ease the burden. Consider setting aside some money each month for emergencies or unexpected expenses, and make sure to stick to your budget as much as possible.
How to Save Despite Rising Inflation
How am I supposed to pay off debt, much less save when everything costs more? This is a valid question that many of our Truvize clients might be asking. There are two answers to this: revise your budget or earn more income. Earning more income may require a bit of thinking outside the box.
If the ends are not meeting, you can come up with extra income by going the extra mile in other areas to compensate:
Sell unused electronics or other house items – Inflation can work to your advantage in this area. With prices on the rise, consumers are interested now more than ever in shopping used.
Use spare time on flexible jobs like driving or delivering food – Again, with inflation on the rise, working class roles and minimum wage jobs are paying almost double for these types of services.
Carpool to save on gas – You and a spouse or perhaps a neighbor or friend can share rides to decrease the need to pay for gas.
Increase 401(k) contributions – If you have a 401(k), even a slight increase in contributions can make a big difference for the future. This may seem counter intuitive; however, most companies offer a match which means you’d be saving more.
Rent garage or guestroom space – With more middle-class Americans looking for more residual income, using your property to earn money has become very popular and accessible.
Inflation may be a complex topic, but its effects on our daily lives are all too real. By understanding what inflation is, how it affects us, and what we can do about it, we can better prepare ourselves for its potential impact. Whether it’s cutting back on expenses, paying off debt, or building up a savings cushion, there are steps we can take to minimize inflation’s effects on our budgets. You don’t have to figure it all out on your own, Truvize wants to help!