Your Funds: Hoping to avoid inflation? Make these moves –

The talking head on my local morning news show was gabbing about how “Inflation is everywhere right now. It’s unavoidable.”
He and his co-hosts complained about prices for steak and gasoline, the reduced size of standard packages of bacon that are hiding price increases, and more. It was standard chatter about inflation these days, it just happened to be on television.
But what struck me wasn’t the higher prices, but rather that inflation is “unavoidable.”
A Gallup poll released late in January found that nearly 80% of Americans expect inflation to increase over the next six months; while Americans always anticipate rising prices — even during times with virtually no inflation, surveys suggested that a lot of people still feared it — it was the highest level of inflation fear ever found by the study, eclipsing the previous record set in 2005.
With inflation rates at their highest levels in 40 years, those fears are manifesting seemingly everywhere. While economies do nothing better than resolve supply/demand imbalances — and there will be some relief as supply-chain problems and other shortage-inducing issues are fixed — it’s abundantly clear that inflation will be on our minds and our wallets for at least the next year.
You don’t have to like it, you just have to deal with it.
Start by recognizing that while you can’t completely avoid inflation, there are ways to sidestep it. Yes, it stinks that most of them involve changing consumption habits and patterns. Some of those fixes are easier to accomplish than others or are driven by circumstances.
One warning here is that the classic cut-spending tropes — brown-bagging lunch and cutting back on the coffee habit — may not be so effective during pandemic times, if only because more workers are at home so they’re not buying lunch at the office or stopping for coffee during their commute.
(That doesn’t mean there isn’t room for savings there; a recent analysis from Clever Real Estate found that the average cost of buying a cup of coffee every weekday adds up to $1,134 spent on coffee per year. That’s roughly 1.7% of the U.S. median household income.)
But since today’s high inflation is so different than the standard seen for most of our lifetimes, so are the measures we can take to sidestep some of the pricing pressure. Consider these actions to get some relief:
Review your budget.
Only if you budget and/or track spending will you know for certain where inflation is hitting home. That lets you react and respond based on your habits rather than on national numbers that may not accurately summarize what’s happening in your home. The good news is that there are plenty of financial apps that make this process easy; give one a try.
Develop purchase plans; shop from a list.
Avoiding what researchers call the “shopping momentum effect” — where once you start spending, it’s easier to keep going — is easier with a list focused on what you need; many people also say buying groceries online helps them avoid impulse spending (if only because there is no candy counter at checkout).
Make patience your ally.
Lumber prices, for example, spiked early in the pandemic, and have started dropping from recent record highs. Likewise, auto prices have spiked as chip shortages impacted manufacturers, a situation the automakers are working to resolve.
Since those cost increases are temporary, consider putting off the improvements/purchases until prices cool off. While you wait, set aside cash you had earmarked for the big expenditures; that additional savings will help cover any price hikes that you can’t avoid when you find that better time to move forward.
Price check before you buy.
When shopping online, put an item in your cart or on a favorites list, but stop before checking out. Chances are good that item will show up in the ads and emails you get for the next few days, which might bring you a better deal as retailers frequently send alerts when items you’ve shown interest in have a new discount.
Attack your bills.
Likewise, do a price check on insurance before automatically renewing existing policies. If you have had the same insurers for years, there’s a great chance that competition in the industry has made better deals available.
Ask for a raise.
Chuck Jaffe
Chuck Jaffe is a nationally syndicated financial columnist and the host of “Money Life With Chuck Jaffe.” You can reach him at [email protected] and tune in at
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Title: First mortgage and home equity process design consultant at Bank of America
Chuck Jaffe
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