When everything costs more

Recent trips to the grocery store may be leaving you asking yourself, “Is it my imagination or is everything more expensive?” The answer is, “No, you are not imagining it!” According to the Bureau of Labor Statistics, prices of many of the items that we purchase on a frequent basis have sharply increased. At the grocery store things like meat, fish and poultry cost 12% more than they did twelve months ago, and gasoline prices have risen more than 40%. In real dollars, that means that this time last year, if you were paying about $3.00 per gallon, now you would be paying about $4.20.

Why is everything so much more expensive?

The explanation for the steep increase is inflation. Inflation refers to an overall price increase in the cost of goods and services, which means your dollar doesn’t go as far as it used to. The causes of inflation are beyond any individual’s actions or control, and many of the drivers of current inflation lie in the aftermath of the pandemic. Between the pent-up demand for goods and services – and labor shortages in providing those goods and services, we are a bit like corks riding in rough waters. There are forces beyond our control that are shifting and changing the direction of the economy. But, also like corks, we can be resilient with behaviors to keep us afloat until we reach calmer waters.

Reduce financial stress

Wondering what you can do to smooth out the ride? Having a strategy often helps us regain a sense of control over our lives. And having a sense of control helps reduce stress. Here are some suggestions for how to adjust your expectations of yourself, your family and your community.

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  Focus on what you can control. Remember, this won’t last forever. As is the case any time money is tight, we have two choices before us: earn more or spend less. For the time being, look at your spending habits and see if there are ways you can cut back.

• Communicate openly with your family about the situation. Enlist everyone to pitch in and emphasize how important they are to successfully navigating this time together. Each family member has an important role to play.

• Try to avoid any major purchases until things settle down. It’s a good time to shift your focus from consumption to savings. If possible, repair rather than replace.

• Look for ways to minimize your expenses:

  • Buy items you use often in bulk (you could team up with someone; buy bulk and then split among friends and family).

  • Look for alternatives to more expensive items (good time to try new recipes; find creative uses for leftovers).

  • Barter for goods and services within your community.

• With warmer weather coming, it’s a good time to work on home repairs, DIY projects or spring cleaning. This will allow you to take stock of what you currently have and consider selling what you’re no longer using.

Keep going

Take a moment to look at your life from a distance. Remind yourself that this situation is not forever and focus on what you can prioritize in the short term. Allow yourself to be open to temporary ways to help you feel more in control.

University of Minnesota Extension has further resources for making financial decisions during difficult times and adjusting to income loss. Or learn from an Extension educator with expertise in personal finance at a webinar or event in your community.