Inflation is Affecting Everything From the Global Economy to Your Personal Budget
With the current US inflation rate at over 8%, many of us are feeling a difference in our budgets. And unfortunately, the US is not alone in experiencing a historically high inflation rate: according to analysis by the Pew Research Center, of 44 advanced economies around the world, 37 are experiencing inflation that is at least double what it was pre-pandemic. And regardless of the how much inflation each country has experienced, most have followed a similar path: relatively low levels of inflation before the pandemic struck in early 2020, which then turned into flat or falling rates from 2020-early 2021 (as a result of reduced economic activity around the world) — and now, rates that began rising in mid to late 2021 and haven’t stopped, as the world has struggled to get back on its feet.
It’s good to understand how larger social, economic and environmental forces such as distant (or not so distant) wars, extreme weather events and other climate change impacts, global markets, and economic cycles influence the current inflation rate — and how this can have a direct impact on your personal finances. Hopefully this understanding can help to reduce any feelings (like stress, shame, anxiety) you may have around financial struggles — and free you to focus on the things that you dohave control over.
But still, understanding inflation doesn’t change the day to day reality of rising prices that, for many, make it much harder to make ends meet. So what is an environmentalist to do to cope with inflation while still making a difference for our planet? Fortunately, many actions that you can take to reduce the effect of inflation on your finances, also happen to be beneficial for the environment. And if you’re struggling to get by, never mind help the environment, that’s completely understandable. In times like these, it’s about doing what you can with the resources that you have.
Here are 10 Tips To Help you Soften The Impact of Inflation On Your Finances
1. DETERMINE HOW MUCH INFLATION IS AFFECTING YOU
To do this, one financial advisor recommends comparing how much you spent on the same things in the first 4 months of 2021, vs. what you spent in the first 4 months of 2022. Because we all have unique lives and circumstances, inflation affects everyone differently. And doing this will give you a really clear idea of whether you’re spending significantly more of your hard-earned dollars.
2. AND PLAN ACCORDINGLY
Once you’re crystal clear on how inflation is affecting you, it’s time to take a look at your entire monthly budget. What is your post-tax income each month, and how has that changed in comparison to your expenses? If you’re spending significantly more on the same things but are still earning the same amount, you’ll definitely benefit from sitting down and building out a personal finance budget.
3. FIND WAYS TO REDUCE YOUR MONTHLY EXPENSES
Whether it’s trimming unnecessary services from your cell phone plan (i.e. if you have wifi at home and work, you may not need unlimited data on your phone), cutting back on streaming services, evaluating any recurring subscriptions, or negotiating a better home or car insurance rate, there are steps you can take today to reduce your monthly expenses.
4. SAVE MONEY AT THE GROCERY CHECKOUT WITH MEAL PLANNING
According to a report compiled by waste management consulting firm RTS, American households throw away an average of $1,600 a year in produce. One way to combat this is by planning out your meals. That might mean sitting down and mapping out each meal based on your schedule, prepping up ingredients, or cooking big batches every few days. Whatever works best for you!
5. BUY STAPLES IN BULK WHENEVER YOU CAN
Another great way to save money at the grocery store checkout (and help the environment) is to shop at stores that sell dry ingredients in bulk. Because you can control the amount of things that you purchase right down to the ounce, you’ll be able to get exactly what you need. And typically, bulk items come with a cheaper price tag than prepackaged ones do. To save even more, consider joining a food buying club (or starting one)!
6.JOIN RESALE MARKETPLACES
From Craigslist to Poshmark, and from Facebook Marketplace to eBay, there are a wealth of online marketplaces where you can buy and sell gently used goods. From like new furniture, to clothing, tools, and more, you can find just about anything you need at a discount. Just make sure to do your research to ensure that you’re getting the best deal, and meet up in “safe trade” or “safe online exchange” locations (many police stations offer designated areas for this).