Inflation is the rate at which the cost of goods and services rises. Inflation affects and is measured by the consumer price index (CPI), which monitors the average prices of goods and services across categories like food, vehicles, apparel, and healthcare services.
Due to inflation, your hard-earned money will buy you fewer groceries, gas, medical services, or anything else than previously. While inflation affects most industries, how much it affects them varies. After all, not all goods and services increase at the same percentage. Here’s a look at a few industries most impacted by inflation according to the CPI:
Food prices go up when inflation hits due to the increased costs of agriculture, labor shortages, and infrastructure issues, like a shortage of truck drivers. It should be no surprise that your grocery bill is more expensive than it used to be.
The increase in oil prices has led to a rise in fuel prices for airplanes, which eats into the earnings of many airlines. Also, since travel is often a nonessential expense, many people tend to spend less on airfare or avoid airfare costs altogether, further hurting the bottom line of the air transportation industry.
Due to the increase in the costs of wool, leather, cotton, and other materials, the clothing industry can be significantly affected by inflation. Often, apparel companies pass the increased costs on to their customers. For this reason, consumers may shop for clothing less often or buy used clothing during times of inflation.
Fortunately, there are steps you can take to prepare for and combat inflation affects on industries, including:
A budget is a spending plan that takes your income and expenses into account. It can help ensure you have enough money for your needs and wants. If you don’t already have a budget, consider the pay-yourself-first budget, zero-based budget, or 50/30/20 budget.
Likely, you may spend money on goods and services that you don’t need or want. These may include a gym membership you never use, daily trips to the coffee shop, and cable television. Getting rid of them to help free up your monthly cash flow.
Debt can make it difficult for you to meet financial goals during an era of inflation. The faster you pay them off, the sooner you’ll be able to save for a house, buy a new car, build an emergency fund, or contribute to your retirement savings accounts.
A financial professional can help you determine a strategy to be financially secure when inflation is at an all-time high. Contact them today to help determine the ideal strategy for your unique situation and goals.
SWG 2208431-0522c The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be speciﬁc ﬁnancial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.
Senior Planning Services offers a broad range of services from retirement planning, insurance products, Medicare supplements, long term care, and estate planning. We can also assist you with reverse Mortgages and personalized guidance into your retirement years. Contact us today to get started and schedule your first appointment.