Here Are Some Ways To Cope With Inflation Anxiety
Americans right now may be feeling anxious about their money, what with continual rising interest rates, and a stock market that looks like it’s taking a ride through an amusement park.
More than 40% of U.S. adults said that money concerns hurt their mental health, according to a recent survey from Bankrate. Most of those who said money took a toll, felt stressed, anxious, and overwhelmed.
The most considerable concern on the minds of many is inflation. This has hit most major expenses while outweighing any potential wage gains at the same time. Here are ways that financial experts say can help.
If you’re faced with a difficult financial environment (or any similar stressful environment, it can be important to consider what is within your control, and what isn’t, per Preston Cherry, a certified financial planner, certified financial therapist, and founder of Concurrent Financial Planning in Omaha, Nebraska.
“We can’t control things like inflation, war, market cycles, or economic cycles – those things are going to happen,” he said. “Uncertainty is certain.”
With these thoughts in mind, he says that this can help people in taking some of the blame and shame off of themselves and can better be able to process what is happening in the here and now.
Make Some Money Adjustments If Able
One big thing that you can do is check to see any overspending you may be doing.
“It’s always a healthy thing to do but more so given the inflationary pressures,” said Katie Nixon, executive vice president and chief investment officer for the wealth management business at Northern Trust. “You have to make sure that your budget accommodates the fact that your needs have gotten more expensive.”
Bear in mind that keeping spending within your budget might mean that you’ll need to cut some discretionary spending like entertainment, travel, or dining out. Lots of Americans have already made those cuts. I know it has caused me to reexamine a lot of my existing subscriptions, many of whose prices have equally gone up as well.
While it may be common sense, experts are also recommending building up any emergency savings, if able. If you have any high-interest credit cards, consider paying these down sooner rather than later too. If you need a guideline for your emergency savings, advisors suggest your emergency fund be somewhere between three and six months of living expenses.
“You want a cash cushion to have a guard rail against any large pendulum swings back,” said Cherry.
Cycles Can, and Do Happen
While it can be tough, it’s advised that Americans keep in mind that economic cycles are indeed that – cyclical.
“Our view is that we have seen at or close to peak inflation, and that’s good news,” said Nixon. “There’s been a lot of damage done, but it may coming to an end.”
Nixon referenced recent earnings reports from Walmart and Target, which provided a glimpse into shifting consumer spending, and that that the large retailers were taking on the higher prices of goods, versus passing them onto their customers.
At the end of the day though, she recommended that everyone continue to watch their cash flows over the upcoming months, with prices expected to remain elevated even after inflation dwindles.
“It doesn’t mean that we’re going back to 2% in the next year or so, but it does mean we’re coming off those high levels,” said Nixon.
How are you currently handling inflation readers? Feel free to leave a comment below!
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