Inflation 2023: How To Prepare Before It’s Too Late

Inflation 2023: How To Prepare Before It’s Too Late

Casey Bond   Monday, December 26, 2022

Inflation has been one of the most pressing money issues plaguing the globe this year. In the U.S., inflation was 7.7% for the 12 months ended October 2022. It’s put a major strain on household finances, and Americans are wondering if relief is in sight.

“Generally speaking, the health of the U.S. economy is strong, but is undergoing a transition from pandemic conditions to post-pandemic conditions,” said Keith Sultemeier, president and CEO at Kinecta Federal Credit Union.

That transition probably won’t happen quickly, however, and while inflation will eventually slow, we can likely expect higher-than-usual levels well into 2023.

So what can you do to prepare your finances for more inflation next year? Consider these tips.

Get Serious About Budgeting

With inflation hitting the cost of everyday essentials the hardest, it’s important to review your household spending habits. “This can greatly help you in getting a complete picture of your financial habits and where adjustments may be made in order to maintain sufficient savings,” Sultemeier said.

For example, if you regularly exceed your food budget, you may want to look into bulk buying and meal planning to cut costs. If it’s gas for your car that’s straining your finances, investigate public transportation options. Remember, these changes can be temporary until inflation reaches ideal levels.

Avoid Emotional Money Decisions

The Federal Reserve has been in charge of keeping inflation in check. So as inflation has continued to hit record numbers, it has instituted a number of hikes to its target interest rate. Aside from making it much more expensive to borrow money, these rate hikes tend to cause the market to jump.

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