Your funds: Hoping to avoid inflation? Do these moves | Economic news


The talking head on my local morning news show was talking about how “inflation is everywhere right now. It’s inevitable.

He and his co-hosts have complained about steak and gas prices, the reduced size of standard bacon wrappers that hide price increases, and more. It was the standard inflation chatter these days, it happened to be on TV.

But what struck me were not the higher prices, but rather the fact that inflation is “inevitable”.

A Gallup poll released in late January found that nearly 80% of Americans expect inflation to rise over the next six months; while Americans still anticipate rising prices – even during times when there is virtually no inflation, polls have suggested that many people still fear it – this was the level of fear of highest inflation ever found by the study, eclipsing the previous record set in 2005.

With inflation rates at their highest level in 40 years, these fears are seemingly playing out everywhere. As economies do nothing better than to resolve imbalances between supply and demand – and there will be some relief as supply chain issues and other shortage-inducing issues are resolved – it is quite clear that inflation will be on our minds and in our wallets for at least the next year.

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You don’t have to like it, you just have to deal with it.

Start by recognizing that while you can’t completely avoid inflation, there are ways to avoid it. Yes, it stinks that most of them involve changing habits and consumption patterns. Some of these fixes are easier to perform than others or are driven by circumstances.

A caveat here is that the classic tropes of cutting expenses — brown bag lunch and cutting the coffee habit — may not be as effective in a pandemic, if only because more workers are at home, so they don’t buy lunch at the office or stop for coffee on their commute.

(That’s not to say there isn’t room to save there; a recent analysis by Clever Real Estate found that the average cost of buying a cup of coffee each weekday s amounts to $1,134 spent on coffee per year. That’s about 1.7% of the median household income in the United States.)

But because today’s high inflation is so different from the norm seen for most of our lives, so are the steps we can take to avoid some of the price pressure. Consider these actions to get some relief:

  • It’s not fun, but reviewing your budget to account for price changes over time is key when inflation hits the cost of everyday items.

Only if you budget and/or track your spending will you know for sure where inflation is hitting. This allows you to react and respond based on your habits rather than national numbers which may not accurately summarize what is happening back home. The good news is that there are plenty of financial apps that make this process easier. try one.

Develop purchasing plans; buy from a list.

  • Most people know what they want/need when they walk into a store, but that plan breaks down when faced with impulse selling and buying.

It’s easier to avoid what researchers call the “purchase momentum effect” – where once you start spending, it’s easier to keep going – with a list focused on what you need ; many people also say buying groceries online helps them avoid impulse spending (if only because there’s no candy counter at the checkout).

  • When it comes to major purchases like a new or used car, big projects like home renovations, consider the impact of inflation on costs and the duration of price increases.

Timber prices, for example, soared at the start of the pandemic and have begun to fall from recent highs. Likewise, auto prices soared as chip shortages plagued manufacturers, a situation automakers are scrambling to address.

Since these cost increases are temporary, consider postponing upgrades/purchases until prices drop. While you wait, set aside the money you had set aside for big expenses; that extra savings will help cover price spikes you can’t avoid when you find the best time to move forward.

Check the price before buying.

  • If you find “the perfect thing” at the mall or discount store, toss it in your cart, but take a moment to search for the item on your phone. Many stores match prices if you find a better deal; if they don’t, you know where to find the cheaper item.

When shopping online, put an item in your cart or on a favorites list, but stop before you pay. Chances are this item will show up in advertisements and emails you receive over the next few days, which could get you a better deal, as retailers frequently send out alerts when the items you have expressed interest receive a further discount.

  • You have control over certain monthly expenses, including internet, TV and cell phone bills. Check exactly what you’re paying for and remove features/channels/subscriptions you no longer want or need. Check if the service package you signed up for has been upgraded to something cheaper/better that suits you.

Likewise, check the price of insurance before automatically renewing existing policies. If you’ve had the same insurers for years, chances are competition in the industry has resulted in better deals.

  • It can be an uncomfortable conversation to have with the boss – and you should investigate your other job prospects first – but in a time when good employees are hard to come by and many companies pay above levels ways to attract and keep workers, you can hold good cards for a raise.

Chuck Jaffe is a nationally syndicated financial columnist and host of “Money Life With Chuck Jaffe.” You can reach him at and log in at


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