Inflation has become a hot-button issue in recent months. It’s a problem that generally affects everyone, but there are ways to protect yourself against it. In this blog post, we’ll offer some practical tips to help you keep your finances healthy in the face of inflation.
What is Inflation?
Inflation is the rate at which the prices of goods and services increase over time. In other words, it’s the amount of money you need to spend to buy the same amount of goods and services as you could have bought last year.
Inflation affects daily modern life in a few different ways. For one, it affects how much money you need to spend to buy the things you want or need. If the prices of goods and services rise faster than your income, you’ll have a harder time making ends meet.
Additionally, inflation can erode the value of your savings. If you have $100 saved up and inflation is 3%, then a year from now you’ll only be able to buy $97 worth of goods and services with that $100.
Why Is Inflation an Issue in 2022
You’re correct if you guessed it had something to do with the coronavirus pandemic. The current high inflation rates are due to a number of factors, the most important of which is supply and demand.
Many people lost their employment or had their work hours curtailed when the pandemic hit in 2020, and they had to be cautious with their spending. Consumers now have more money available and are more likely to spend it thanks to a stronger job market and stimulus programs that put money in people’s hands. When demand for a product grows, supply shrinks, and corporations raise their prices to compensate.
Hope is not lost. There are a few things you can do to fight inflation.
Tips to Protect Yourself from Inflation
As a consumer, there are several things you can do to guard yourself against inflation:
By taking these steps, you can help protect yourself against the effects of inflation. Do you have a tip you’d like to share? Let us know in the below comments – we’d love to hear from you. =)