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!

What’s 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 or economic disasters.

Although inflation rates have decreased since 2022, the effects can still be felt in a variety of consumer products and industries.

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:

HOUSING

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.

FOOD

When inflation rises, the cost of produce can rise as well. According to the July 2023 report by the U.S. Department of Agriculture, the Consumer Price Index (CPI) for all food increased by 0.1% from May 2023 to June 2023, and was up 5.7% from June 2022.

The department found that grocery store and supermarket CPI’s decreased by 0.1% while restaurant CPI’s increased by 0.4%. On a positive note, the department predicts food prices will grow more slowly throughout 2023 compared to 2022.

GASOLINE

Inflation can cause oil prices to rise, causing gas prices to rise as a result. Over the last year, though, gas prices have began to simmer down. According to the U.S. Bureau of Labor Statistics, as of July 2023, gasoline prices have decreased by 19.9% over the last year.

The takeaway

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.