For many Americans, inflation is a nightmare. What happens to those dollars when they lose value?
They will have to make hard trade-offs beyond cutting streaming subscriptions and buying cheaper store-brand groceries. Americans may have to make difficult choices when dealing with high inflation, such as whether they want enough food or rent.
Families that are most affected by inflation have very little savings and limited back-up resources. According to Phuong Luong (a certified financial planner based in Massachusetts and the founder of Just Wealth, a financial education company, their limited financial resources can be due to historical inequality. For families with limited resources, basic necessities may become impossible to afford when inflation makes everything more expensive.
It is possible that you will need to make ends meet to provide for your extended family. You might need to travel to the grocery or doctor's offices in order to make ends meet.
Luong stated that "your proximity to people who have resources and people who are wealthy is going to differ depending on where and how you live." "There is more to life than budgeting and expenses."
These are some ways to combat high inflation in times when money is tight.
You should first cover the costs that will allow you to live comfortably, such as housing costs, utility bills, and food. You should also cover expenses that allow you to work such as transportation costs, cell phone bills, and child care.
The next-level priorities are those which can have major consequences if they aren't paid. Consider taxes, child support payments, and insurance.
You should aim to make the minimum payment on credit cards so you don't accumulate high interest debt.
Find support if you're having trouble paying your bills. Luong recommends Findhelp.org which provides a list of local programs that can help Americans reduce costs in different areas, including medical care and food.
To get assistance with housing, food, and other emergency expenses, call 211 or visit www.211.org.
It is possible to save money by calling your bank, lender, bank, or cell phone provider and asking for help.
Emlen Miles -Mattingly, cofounder of Onyx Advisor Network in Sacramento, California, said that companies are "a little more compassionate than they have ever been" due to the pandemic.
They may be willing to lower or suspend your payments or forgive past due bills. They might even lower your interest rates.
"Community is going to help us overcome our financial difficulties," Dasha Kennedy, an Atlanta-based financial activist who founded The Broke Black Girl, which provides financial education for African-American women.
Costs can be reduced by relying on your friends, family, and neighbors. Kennedy recommends moving in with your family to reduce housing costs. You can also pool your resources by sharing a vehicle, or splitting the cost of a large expense.
Look into libraries, recreation, and community centers to make connections with locals who are supportive of your cause. You can also connect with your neighborhood groups via social media platforms such as Facebook and Nextdoor.
Members of the community might share information about local resources, or how they were able to save money locally.
It is possible to diversify your income stream and help you cover higher costs. Kennedy suggests that you increase your earnings by working. Consider working overtime, negotiating raises, and changing your role.
You can also explore side jobs -- but be careful. Many online gigs can waste your time, steal your money, or misappropriate your personal information.
You can sell your handmade goods on Etsy if you are creative. You can also sell your unwanted clothing and household items on Ebay or online consignment shops like ThredUp.