Today we are talking about how to beat rising inflation. I’ll break it down into simple steps to take in major categories in our lives and stay until the end to find out my biggest piece of advice.
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Hi, I’m Jessica and I love talking about financial freedom after experiencing burnout early in my pharmacist career. We talk passive income and simplifying on this channel to combat stress and burnout. If you haven’t seen my burnout story or our debt-free journey while in residency/fellowship, please click those video links below.
What is Inflation?
According to Investopedia – Inflation is the decline in purchasing power of a given currency over time.
We can quantify the inflation rate by evaluating the increase of an average price of selected goods and services in the economy over a period of time.
Sometimes this means we see the price of a good we normally buy rise over time.
Sometimes we see shrinkflation where the size of the product decreases over time while the price remains the same. This is a sneaky way for a company to foul you into thinking the item is staying the same price because how many people check the size of a chocolate bar or cereal box or snack box every time they enter the grocery store?
The U.S. Bureau of Labor Statistics reports that the Consumer Price Index for all urban consumers was up by 7.5% in the 12-month period ending in January 2022 – the largest 12-month increase since the period ending June 1982.
How can we beat inflation?
Just as with our previous discussions on financial well-being, I like to approach it with the Kakeibo Method and our 4 big categories – Survival, Optional, Cultural and Extra. Get our FREE Financial Starter Kit linked below for details on this method.
Let’s focus on Survival since that is the biggest impact category. We think Housing, Transportation and Food.
- Survival
- Food
- Lunch deals instead of dinner for sushi
- Happy hour deals
- Go into grocery store instead of doing delivery and delivery fees
- Always use a list when grocery shopping (no shopping while hungry)
- Reduce or cancel meal subscription services
- Transportation
- No cheaper car than the one you own
- Stay on top of yearly maintenance
- Wait as long as can
- Shop by owner or fixed prices such as Carmax
- Home
- Continue renting
- Scale down home expectations – single family vs. shared wall or townhouse
- Buy new build with fixed price and no bidding wars
- Consumer Goods
- Buy Nothing Group
- Free option or borrow option
- Shop secondhand for certain things – could be books, children’s items or clothing – if get overwhelmed in big secondhand stores, go to online options or narrow focus of specific item you are looking for
Biggest piece of advice to beat inflation?
After accessing expenses, focus on income. Negotiate at your current job. Remember, a 3% raise is losing to inflation when the inflation rate is 7%. Change jobs if you feel a higher salary could be earned elsewhere.
Or, diversify your income streams. Invest early and often – retirement funds, stock market index funds, real estate. Start your small business. Don’t be afraid to start. Watch my video on 5 Ways to earn passive income here and 7+ income streams here
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