(NewsUSA) - Financial inflation, whether you have experienced it before or this is your first time, can seem frightening, and the rapid rise in prices of gas, groceries and consumer goods in the past year threatens to throw off the best-planned budgets.
The inflation currently affecting the United States and elsewhere is caused by many factors, including government stimulus, increased consumer demand, COVID-19 and supply chain issues.
Although you may feel that inflation is spiraling your personal finances out of control, keep in mind that this period will pass. You can weather the storm with some smart money management strategies.
The first rule of surviving inflation is not to panic, says Joseph Kelly, a CERTIFIED FINANCIAL PLANNERTM professional. In fact, the best strategy to combat inflation is to focus on financial basics. “Know what you’re spending your money on, have a long-term investment plan and consider ways to reduce your debt,” he explains.
Try these tips to make the most of your money during tight times:
• Spend less. It seems obvious, but small savings add up. Some easy ways to get more money back in your budget include seeking less- expensive options for internet and phone service, as well as for homeowners and car insurance. Cut gym memberships, and look for free exercise classes online, at least for now. Look for deals on groceries, and choose store brands or generics. If you drive to work, ask for more opportunities to work from home, or consider public transportation or carpooling.
• Earn more. Depending on the nature of your job, the current environment of remote work makes it possible for many people to add a side business, such as freelance consulting in your area of expertise, or selling things on eBay, Craigslist, Etsy or other online venues. Other options include seasonal or part-time in-person work. Choose somewhere you like to shop, and you may get an employee discount, too.
• Curb debt. Don’t let inflation lure you into the trap of putting more on credit cards. Instead, try to reduce your debt by consolidating any current credit card debt on one card; this can reduce your overall interest rate while you make payments. Other debt-reduction strategies include paying the card with the highest interest rate first, or the account with the smallest balance first.
No matter what strategies you use to save money, remember that periods of inflation are temporary. A CERTIFIED FINANCIAL PLANNERTM professional can provide additional guidance and help you stay on track with your short-term and long-term financial goals.
Visit LetsMakeAPlan.org for more information.