Inflation got you down?
You’re not alone!
The surge in inflation through the first half of 2022 has many US consumers feeling like their financial freedom is being eroded by skyrocketing prices.
From the gas pump to the grocery store, many are facing unprecedented sticker shock and having to come to terms with the fact that their dollar isn’t going as far as it used to. So what is to blame for this sudden, sharp increase in consumer prices?
Simply put – the economic forces of supply and demand. A perfect storm of events over the past couple of years has put businesses and economies in a position where they simply cannot produce enough goods to meet demand. On one side of the equation, a strong labor market and increased wage growth have put consumer balance sheets in an improved position to make large purchases. To compound this issue, Americans have spent much of the last 2 years cooped up under COVID lockdowns and restrictions.
Now that most businesses are re-approaching normality, families are finally getting around to buying those big-ticket items they have been eyeing since the advent of the pandemic. While on the business/production side, businesses are facing major supply chain shortages due to disruptions caused by COVID, the Russia/Ukraine conflict, or other geopolitical or logistical issues.
With numerous consumers competing for a limited quantity of product, prices have been driven up (and likely this trend will continue) until either more goods become available through easing of supply chain restraints, or inflation drives prices to a point where the number of willing and able buyers decreases – quenching demand.
So what can we do NOW to offset the sting of inflation:
- Spending Plan: Ensure you’ve got a spending plan in place that is in line with your core values.
- Insurance Review: Price shop all of your insurance needs and make adjustments if possible.
- Reduce Expenses: Stop wasting money on subscriptions or services you don’t need or use.
Jake Fromm | Lead Investment Analyst, CFS® | It is our mission to help you think differently about your wealth so you can LIVE WELLthy™ today and tomorrow.