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Colorado Credit Union

Handling High Inflation

Handling High Inflation
Colorado Credit Union

Slow and steady inflation is an expected part of a healthy financial system, but high inflation means high prices, rising interest rates, and lots of concerns about the best choices for our financial future.

Inflation Refresher—Inflation is the value of currency dropping over time. There are a lot of interesting economic concepts that detail why this happens, but ultimately if inflation happens too suddenly it can put a huge burden on the consumer.

Nobody likes seeing the price of their favorite foods going up, and it’s even worse when the price of everything else goes up along with it. But that's the reality of high inflation. When the dollar is valued less, prices everywhere are going to rise.

What You’ve Saved

Budgets are hit hard during high inflation, especially for those that need to count every dollar in order to get by. If high inflation puts you in a tight financial squeeze, the best way to respond is to take a deep look at your spending and find non-essentialflexible expenses you can cut. Food is essential; coffee out everyday is non-essential, hobbies are flexible, and houses are non-flexible.

You might find things to cut that you won’t even miss, like unused online subscriptions, various fast foods, or forgetting to go to the gym. You might need to cut things you enjoy, like YouTube without ads, unlimited data phone plans, and frequently dining out at restaurants. Every person is unique in what they spend and what is non-essential and flexible.

What You’re Worth

A big problem with high inflation is our expenses get bigger, but our wages don’t. In an ideal world, our wages would automatically increase as the dollar loses value, but the reality is companies are not required to raise wages to match inflation (and often don’t). So we, the consumer, have to bear the burden of higher prices until our economy evens out. Additionally doesn’t hurt to talk to your employer about getting a raise to at least match inflation.

Another option is you can find extra forms of income to increase your budget. This is often harder and takes longer than cutting expenses, but finding extra sources of income can strengthen your budget while making fewer cuts. It could be a good time to consider earning extra money by doing something you’re passionate about on the side.

If you’re looking for additional ways to cope with rising prices, you might explore other ways of making money such as selling old clothes on resale sites, picking up a shift with a ride share app, or pursuing other personal creative projects that can generate income.

While we, as consumers, have little control over when inflation will strike, we can control how we respond to it. High inflation and rising prices are challenging for everyone. However, we at times need to get creative with what we should do to turn those overpriced lemons into reasonably priced lemonade.

Source: Banzai


While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

Neither Banzai nor Colorado Credit Union make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Banzai and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Banzai and its sponsoring partners from any such liability. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.