Earlier this summer, it was clear that everything from groceries to gasoline was costing more money than normal. And things haven’t really changed much since.
In fact, the Consumer Price Index, which measures fluctuations in the cost of common goods and services, just released its August data, and it found that consumer prices rose 5.3% from a year ago and 0.3% from July. That 5.3% increase is mostly in line with the 5.4% rise economists were predicting.
People who drive a lot may be feeling the most financial pain. Gas prices are up 42% from a year ago. Along these lines, used car prices are up almost 32% on a year-over-year basis. New vehicle prices rose 1.2%.
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How to combat inflation
Many people assume that when inflation strikes, there’s not much they can do other than grumble about it. But actually, there are steps you can take to protect your finances in the face of inflation.
For one thing, you may want to look at getting yourself on an official budget (that’s a good thing to do even when inflation isn’t an issue). Maybe you haven’t been paying close attention to your monthly bills because you can usually cover all of them without worry.
But if you’ve recently come close to having to dip into your savings to cover your basics, then it’s time to set up a budget and stick to it until things cool off. That could mean forcing yourself to spend less on leisure and entertainment while grocery and gas prices stay high.
Another option to look at is getting a second job on top of your main one. This isn’t necessarily an easy route to take. It’s hard squeezing in extra work when you already have a full-time job. But if you’re able to boost your income by temporarily working a side hustle, you can give yourself a nice financial cushion — one that helps you avoid debt and also makes it so that you don’t have to cut back too drastically on the things you love.
Finally, be savvy about cutting your essential expenses. If you drive to work every day, see if carpooling with a colleague is a possibility. That way, you can split the cost of gas. Furthermore, while you absolutely have to eat, spending some time seeking out supermarket sales could lower your grocery bills.
When will inflation cool off?
It’s hard to predict exactly when the cost of common goods and services will start to come down. But one reason why everything is so expensive right now is that there’s not enough product to go around. Many supply chains were halted during the pandemic, and now, everyone is operating in catch-up mode. Once supply increases to the point where consumer demand can be fully met, prices should start to wane.
Until then, do your best to hang in there. And also, set yourself up with a budget, look at getting a side job, and tweak your routine if possible to minimize the near-term financial strain.
Read More: Consumer Prices Are Up 5.3% Year Over Year