If you are tired of paying higher prices at the supermarket, gas station, and just about anywhere, you are no doubt in good company. Inflation has taken its toll on consumers since the spring and shows no signs of slowing down.
In October, the consumer price index, a measure of the cost of goods, was up 6.2% from a year earlier. And recently, investment banking giant Goldman Sachs warned that inflation could get worse before consumer prices start to fall.
Now, if you are wondering what 2022 has in store for you when it comes to inflation, the answer is, we just don’t know. It is reasonable to expect the cost of consumer goods to remain high at the start of the year, especially as supply chain issues persist or even worsen thanks to the presence of the omicron variant. newly identified. And while things could improve as 2022 progresses, it’s not something consumers can count on.
This is why you need to be prepared for soaring inflation to continue into the New Year. Here are some steps you can take to keep up with inflation and avoid getting into debt because of it.
1. Rework your budget
It could be that groceries will cost you around $ 400 a month in early 2021. If you’re now spending close to $ 450 at the supermarket, that’s a change you’ll want to factor into your budget.
Take a look at your budget and determine by how much your expenses have increased due to recent inflation. Then adjust your spending in other categories to compensate. For example, you may need to cut expenses like cable or dining out if your essential expenses have grown to the point where your paycheck can barely keep up with them.
2. Increase your income with a second job
You may already be leading a frugal lifestyle, in which case your budget may not have much room to make inflation-fighting changes. If so, then a side activity could be your ticket to sustaining your purchasing power over the coming year. You can use this extra income not only to consolidate your finances, but also to gain more leeway to absorb the higher costs you face for your daily expenses.
If you’re not sure what kind of side activity is right for you, think about how flexible your schedule is. If you can commit to predefined shifts, you may want to work in retail evenings and weekends. But if you need the ability to set your own times, you might want to find a gig that lets you enter data from home or drive passengers around town at your convenience.
3. Boost your emergency savings
The more money you put in a savings account, the more protection you will have in the event of a worsening inflation. If you’re ready to cut back on spending and take a side job, you can use some of that money to save your savings and build a cushion. This way, you will be less likely to go into debt if your bills keep going up.
Sadly, the cost of goods could remain high until 2022. It might not be the news you want to hear, but it is an important reality to face. These tips could help you fight inflation and avoid getting into debt because of it.