Inflation has been on fire over the past year. The war in Ukraine and its impact on oil and the global economy has fanned the flames. Pressures caused by government spending and easy money policies designed to help us emerge from the pandemic have contributed. So, it was no surprise when the Bureau of Economic Analysis tracked inflation at 8.5% at the end of March. Wow.
Will this be a lasting trend? Hard to tell.
For 30-plus years, inflation has been tame. However, tame does not mean toothless. Spend a bit of time with the Bureau of Labor Statistics CPI Inflation Calculator and you’ll get the picture. Rising prices or inflation have eroded about 50% of the purchasing power of the dollar over the past 30 years. And that’s happened during a period of relatively light inflation.
Here are some key considerations as you look to inflation-proof your own finances:
I don’t have a crystal ball, but I do think we all need to have a flexible game plan, and that includes sharpening your inflation-fighting tools.
About the Blogger: JJ Montanaro is a Certified Financial Planner® professional and part of the Military Affairs team at USAA. He’s a graduate of the U.S. Military Academy and has over 20 years of financial planning experience.
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