How does inflation affect me?
You’ve probably noticed that everyday costs are considerably more expensive than they were a month, two months, or even a year ago. Maybe you’ve noticed that your grocery budget doesn’t stretch as far as it used to, or that it takes a pretty penny to fill up your car. Why is everything more expensive now-a-days? That’s right, inflation!
Inflation is the rate at which the prices of everyday goods and services change over time. Inflation is measured in percentages and looks at costs of living, food, gas, and more. Inflation can be caused by multiple factors such as natural disasters or economic disasters (like the COVID-19 pandemic).
According to Statista, as of June 2022, inflation has increased by 9.1% compared to June 2021.
How does this affect me?
Whether you realize it or not, inflation can and will impact your everyday expenses. Here are some of the most common ways inflation could affect you:
Even if you’re not looking to move, you’ve probably heard about how crazy the housing market has been over the last year or so. Due to inflation, housing prices (and rent) can rise, making it harder for those on the hunt for a new home.
When inflation rises, the cost of produce can rise as well. We’re especially seeing this in today’s economy. According to the June 2022 report by the U.S. Department of Agriculture, the Consumer Price Index (CPI) for all food increased by 1.1% from April 2022 to May 2022, and food prices were 10.1% higher than in May of last year.
In addition, the department found that restaurant CPI’s increased 0.7% in May, and grocery store or supermarket CPI’s increased 1.3%. They predict that restaurant prices will increase between 8.5% to 9.5% in 2022. Grocery store or supermarket prices are predicted to increase 6% to 7%.
A dollar doesn’t stretch as far as it used to when it comes to filling up your car! Inflation can cause oil prices to rise, causing gas prices to rise as a result. According to the U.S. Bureau of Labor Statistics, as of June 2022, gasoline has increased 59.9% over the last year, the largest 12-month increase for that index since March 1980. In addition to inflation, there are other factors impacting gas prices.
Inflation affects us all, so how do we ride the wave? When inflation is high, you should prioritize your financial planning. That means it’s a great time to speak to an advisor to explore investments, insurance, and more.