Recent inflation rates translate into higher prices on just about everything. So what’s the best way to protect your finances?
BOISE, Idaho – Inflation, inflation, inflation! It’s in the headlines everywhere this week, but what does it mean?
âWell, it’s just when there are a lot of people trying to buy a limited amount of things. Then whoever provides these things raises the prices because they can say, hey, I have a monopoly on gas or bread and I can charge a little more, âsaid Nic Daniels, financial advisor for Tree City. Advisors in Boise.
Inflation jumped nearly 7% in November, the fastest rate since 1982. Daniels explains that the current situation is not shocking and is the result of many factors that have been accumulating for years.
“What COVID has done and what this pandemic has done is sort of the ability for inflation to catch up and so we see, the news is out today, an inflation of 6.8% year on year from November 2020, well it’s kind of catching up with us now, âDaniels said.
There isn’t a single reason America experiences high inflation. The problems of the supply chain, wages and the global economy are some of the main ones. Really important though, how do we avoid inflated prices on just about everything?
“It will take some time for the supply chain issues to be sorted out and just because a single politician is going to talk to a single politician here because companies that weren’t supposed to stay in business and win money by providing the goods, raw material or manufactured goods that people ask for, they are going to talk to each other and figure out how to get those deliveries on time and cost effectively. It will work on its own, but it could still take about 18 months, âDaniels said.
So what does the average Idahoan have to do now? Is there something? Well, with more expensive products and lagging wages, Daniels says to take a step back and take a look at your financial situation.
âBe very simple, you have to log in. What are your expenses? What are some areas you could hit the pause button on, maybe for a while just to have a little more cash on the side because we feel it. Every time you go to refuel your vehicle, you see it, every time you go to the grocery store, you see it, every time you pay your utility bills, you see it right now. You may just need to make temporary, short-term changes, âDaniels said.
Daniels says now is a good time for people, especially young adults, to take a look at their finances.
âYes, becoming an adult isn’t always fun, but you have to. The point is, if you’re proactive, it’s a lot easier to make the right decisions now instead of being reactive, âDaniels said.
What about the Idahoans who are keeping a close eye on their investments and retirement? To be honest, people will see media reports about the economy and panic that it’s time to act. Daniels says to avoid this train of thought.
âHonestly, stay the course. In the long run, you’ll be very glad you didn’t react to the news and media regarding inflation and just stayed the course, investing monthly for that 15-20 year retirement schedule that lies ahead. of you. Stay the course, emotions are incredible servants, but they are terrible masters. So, don’t let your emotions get the best of you. Stay on course when it comes to investing and financial planning and you will very likely end up well, âDaniels said.
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