Let's Talk: Rethink How To Beat Inflation

May 31, 2022

Are your shopping habits changing? If they haven't yet, you are most likely spending more money than usual. What you are experiencing is inflation. A small amount of inflation is good for the economy as it drives us to save and invest; however, inflation can also cause heartaches if our wages do not grow fast enough. 

To beat inflation, the worst thing you could do right now is nothing. On the contrary, the best thing you could do right now is discover your worth. Once you realize your worth, you are able to gain the confidence and power to decide what is best for your financial future. As the price of goods increases and the cost of borrowing rises, let's talk about ways to rethink how to beat inflation. 

Calculate Your Personal Inflation Rate
A single dollar from February 2021 now has the same buying power as $1.08 in February 2022*. What does this mean? Let’s say a family of four spent on average $250 a week on groceries in 2021. With an average inflation rate of 8%, this same family will likely spend $20 more a week today, $1,040 more a year, if their shopping habits do not change. Are you prepared to take on the added costs inflation brings? 

Now, the average inflation rate does not always reflect your personal inflation rate. For instance, you may not purchase gasoline often or shop at retail outlets for work attire because you work remotely now. Or, it can be as simple as, your diet does not include the average amount of meat purchased. All and all, it is important for you to figure out your personal inflation rate.

To calculate your personal inflation rate, you will need to look at your monthly spending from a year prior and subtract this from your current monthly spending. Then, take this sum and divide it by last year’s monthly spending. This will give you your personal inflation rate.

Spend Less, Continue to Save
Spending less can be challenging as inflation rises. Take the time to adjust your budget accordingly based on your personal inflation rate. This will help you stay on track, especially if you are trying to save. You may need to cut back in order to adjust. For instance, consider meal planning to help control and reduce your grocery costs. Here are a few money spending tips to check out. 

Negotiate Your Salary & Understand Your Employee Benefits
If your salary isn’t keeping up with your personal inflation rate, then it’s time to re-negotiate your wage or pursue a job that does. But before you go into negotiations, you need to do your research and understand what competitors are paying for your level of skills and/or education and what employee benefits are offered.

Thus, the saying “Ask and You Shall Receive” holds true when you know what your worth is. You should also keep in mind that salary negotiations are best to be treated as a conversation with your employer rather than a list of demands. If you know what your worth is; in turn, you will know how to assertively ask for more money, more opportunities, and even a better work life balance if that is something you are after. 

Invest in You
Finally, think about investing in your education and skills to increase your value to your employer. Even though the costs can seem expensive now, future earnings for your skills will increase over time. Talk with your employer to see what career avenues are possible if you choose to start investing in you now.

All things considered, Gulf Coast Bank & Trust Company wants to equip you with all the necessary tools and knowledge to ensure a healthy financial future. To stay up-to-date with inflation and consumer spending, you can visit the U.S. Department of Labor website. And, as always, please know that Gulf Coast Bank & Trust Company is committed to being the bank that cares about you. If you have any topics you would like us to discuss, we invite you to email them to marketing@gulfbank.com with the subject line Let’s Talk.

*U.S. Department of Labor