Inflation has been a nasty word for the past two years. Now after August's numbers have come in, well, you'll need to sit down for this. Inflation actually went up from 3% to 3.2%. That's not good enough for the Federal Reserve which wants the rate down to 2%. Still, things aren't as bad as they'd appear, according to the experts. Here are some tips you should know about when dealing with inflation.

 

Borrowing Money Cautiously

It's tough out there for any individual trying to buy things. The cost of food and gas these days alone is making it a challenge. What if you really want to purchase a new home or a car? Can you swing it?

Don't expect the Fed to help you out when you want to borrow. In fact, it's still the time to buckle up because the interest rates aren't coming down anytime soon. You won't be able to ride along on a 2% or even a 3% interest rate on these major purchases. In fact, interest rates will remain higher for longer.

 

Three Good Pieces of News

The interest rates are challenging, but there is a silver lining in three areas, which says something. First, the economy as a whole is strong. Second, there are jobs available as the labor market also remains strong. Third, customers are still spending, but the rate has slowed somewhat. However, it's still a decent sign toward recovery.

 

Grocery Store Cut-Backs

Everyone has to eat, but inflation has taken a huge bite out of the way you may be dining. When grocery shopping, it's best to find foods that are inexpensive but offer nutritional value. For example, you can build a meal plan by using low-cost staples such as rice, pasta, dried or canned beans and potatoes. Also, canned and frozen fruits and vegetables are an option as they cost less than fresh. Another good point is always choosing a generic brand of food. It's cost-effective over the name brands.

You don't want to waste gas driving all over the place, but often, comparison shopping can help you save money. Also, buying in bulk from stores such as Costco and Sam's Club can save you cash.

 

Credit Card Debt Paydown

No one enjoys being nagged about credit card debt. Making an effort to pay it down will help you during these inflationary times. Taking on debt can stretch anyone's budget, and in order to make a dent, you need to do better than the minimum payment. The more you pay every month that credit card bill comes in, the faster you will get a hold of your finances.

Another way to take advantage is with rewards credit cards. These cards could give you the chance to earn points, miles or cash back on your everyday spending. Or how about a balance transfer? With good credit, a balance transfer credit card with a 0% introductory APR period could help you save on interest while consolidating your debt.

 

Hello, Secondhand Shopping

This can be quite fun and feel rewarding. Secondhand shopping has become more popular than ever whether you're doing it online or in person at stores. From clothing to furniture to used cars and other items, you can score some amazing finds.

eBay, Thred Up and Poshmark are just three e-commerce platforms where you can find some great deals while thrift shopping. You can also visit your local Salvation Army stores, Goodwill and Savers to pay a lot less for items in your home such as dishes and glassware, furniture, clothing and accessories, jewelry, home accents and more. You'd be surprised what you can score.

Not only that, but secondhand shopping is good for Planet Earth because it helps reduce waste. The core values of sustainable living come down to "Reduce, reuse and recycle."

 

ER Fund? Oh, Yes

You should always plan for those accidents and disasters that can strike when you least expect them to. Have an emergency fund for savings that you need to keep liquid. Instead of a traditional savings account, look for one that offers high-yield savings.

Inflation can become a nightmare for people of all income levels. The good news is that inflation has sharply come down from its peak rates in 2022. Hang in there, and budget wisely. You are not alone, and you will get through this.