How inflation impacts Buying Power and what you can do about it
Inflation is a natural part of any economy. It’s always there. Sometimes prices creep up slowly. These days, it seems like prices increase every time you go to the store. It's hurts, no matter who you are.
While inflation doesn’t discriminate, it is certainly hardest felt by the lower and middle class. Having enough money has always been a challenge. Now that challenge is greater, and worse if you have a lower credit score.
What is Buying Power?
Quite simply, “how much can you buy with how much you have?”. And is that number going up or down? Lately, it’s going down.
Example: Buying Power Over the Decades
Suppose in 1980, a gallon of milk cost $1.50, and the average hourly wage was $7.50. Now, a gallon of milk is $4.00 or more. Yet the minimum wage hasn’t gone up at the same level. So, if you’re feeling strapped, it’s likely because you’ve got the same amount of money to spend on more expensive things.
Navigating Inflation: Tips for Consumers
So, what can you do? Here’s four steps you can take to mitigate inflation’s impact on buying power:
- Budgeting and Saving: Pinch the pennies and make good buying decisions. Maintaining a budget and setting aside savings can help when things get tight.
- Refinance car loans: You likely owe less on your vehicle than you did. Refinance it! Even if you have a lower credit score, you can refinance your car loan at the Ashland Community Credit Union, to can help lower payments and increase cash flow.
- Consolidate debt: Another way to increase cash flow is to pay less interest and stretch debt payments over a longer term. Again, even if you have a low credit score, you can apply for a “Get Out of Debt” loan at Ashland Community Credit Union.
- Responsible use of Credit Cards: Credit cards can help to shift payment to a later date. Be very careful to keep your balances from getting high, as interest rates can nullify the benefits.
The bottom line is always changing. Sometimes you’ve got money left over at the end of the month. But if you don’t, it’s important to know that you do have options. And you do have a friend, in the Ashland Community Credit Union. We’re people helping people..and we’re here to help you.
