Personal Finance

How Inflation is Changing Our Lives and Not for the Better

Back in 2021, inflation hit its highest point in 40 years, with prices rising by about 7 percent in December when compared to the previous year. Experts project that inflation will ease in 2023, but that doesn’t mean the impact won’t remain well beyond when the rates recede. Instead, they’ll affect the lives of many, mainly for the worst. If you’re wondering how inflation is changing lives, and not for the better, here’s what you need to know.

How Inflation is Changing Lives

Inflation typically pushes prices up, including on everyday goods and household staples. While some inflation over time usually isn’t avoidable, extreme increases create substantial financial hardships for many people, particularly lower-income households. Inflation to this degree dramatically reduces buying power and, if you’re already struggling with a tight budget, it may seem like your ability to make ends meets evaporates overnight.

Even middle-income households can feel the pinch. Often, rapid inflation isn’t coupled with corresponding wage growth. As purchasing power falls, households that were once reasonably comfortable can end up on the brink.

Retirees Are Burdened As Well

Retirees are similarly burdened. Since many older Americans live on fixed incomes, falling buying power can be catastrophic, especially if it happens quickly.

In all of those cases, quality of life diminishes. Households have to make tough choices. For example, they may have to decide between buying gas to get to work or getting a critical prescription medication. They might end up debating between buying food and covering an electric bill.

While those examples may seem extreme, they can reflect reality for a surprising number of Americans. Additionally, even if inflation rates fall, prices will remain high if inflation is part of the equation at all. While there may be some balancing, some product may keep their bigger price tags for a while, particularly if companies are trying to recoup lost profits that they experienced due to inflation.

Other Sectors That Are Impacted

There are other sectors that also see the impact of inflation. With rapidly rising home prices, first-time buyers may have a difficult time competing in the market. They may be forced to delay homeownership or might take on loans that stretch their budget too thin.

If borrowers have variable rates on loans or credit cards, the interest they pay may be heading upward. When inflation is running rampant, variable rates usually increase, resulting in larger financing charges.

Ultimately, inflation has a significant impact on most people. And, in most cases, it isn’t for the better.

Should You Worry About Inflation?

Generally speaking, worrying about inflation isn’t going to reap any dividends. However, being aware of its presence and potential impact is wise. By knowing when inflation is having an effect, you can make decisions before your budget is stretched too thin. Thus, giving you the ability to better weather the storm. Additionally, you can look for income-boosting opportunities. This could include a side gig or part-time job, allowing you to increase your earnings to compensate for lower buying power.

Ultimately, inflation won’t remain this high forever. As supply chain issues resolve, wages shift, and other changes occur, the situation usually calms notably, even if it doesn’t go away completely. Ideally, you simply want to adapt as much as possible, ensuring you can preserve your buying power until inflation becomes less of an issue.

Have you or your household been personally impacted by inflation? How did it affect your budget and financial wellbeing? Have you found a way to limit its effect on your finances that you’d like to share? Share your thoughts in the comments below.

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Penny Pinchers’ Paradise: The Crème de la Crème of Budget Planners

When you need to create a budget, having a roadmap to follow makes the process easier. With a budget planner, you essentially ensure that nothing falls through the cracks. Plus, some may contain sections or tips that can help you achieve goals that didn’t seem possible previously, and many have fun elements to make the process engaging. If you’re looking for an excellent solution that will help you get your financial life on track, here’s a look at some of the best budget planners around.

Clever Fox Budget Planner

The Clever Fox Budget Planner is an excellent option for anyone who’s new to budgeting, as well as experienced budgeters looking for a straightforward solution. It includes a spot for a monthly budget, expense trackers, monthly budget reviews, savings tracking, debt tracking, and income tracking. Plus, there are places for notes, goal setting, personal financial aspirations, and much more.

There is also a built-in pocket for loose notes or bills. There’s an illustrated user guide to help you get started and three built-in bookmarks to ensure you can get to different sections quickly. Another fun part is that this planner comes in a wide array of colors, so you can choose a hue that brings a smile to your face, making your budgeting activities feel more enjoyable.

Stress Less, Spend Less Budget Planner

The Stress Less, Spend Less Budget Planner doesn’t just provide expense tracking and planning tools; it also focuses on broader financial wellness. It offers ample structure and plenty of space to get organized, as well as mindfulness exercises designed to reduce financial anxiety. You’ll also find financial literacy tips, making this ideal for anyone who has limited experience with money management.

Along with being excellent for creating a budget, this planner has sections to track savings goals. There’s a handy holiday budget section to plan spending related to occasions like Christmas. Plus, there are areas where you can write notes related to reflection topics, which can help you learn more about your money mindset.

GoGirl Budget Planner & Monthly Bill Organizer

With the GoGirl Budget Planner & Monthly Bill Organizer, you get a financial planning book with built-in pockets to hold statements, bills, and notes. It’s a spiralbound book, too, which helps it lay flat when you’re writing. It’s also available in an array of colors, and you’ll find a variety of helpful sections inside, giving you plenty of tools to make achieving your financial goals easier.

Along with budget areas, there are monthly review and spending analysis sections to help you see if you’re on target. Every month has a calendar for simplified tracking, and there are spots to list upcoming expenses that you need to plan for in advance. You also have areas for savings and debt tracking, and there’s a spot for an annual summary that can help you use how far you’ve come.

Clever Fox Budget Planner Pro

Another fantastic option from Clever Fox is the Clever Fox Budget Planner Pro. This one stands apart because it incorporates a cash envelope system, allowing anyone using that technique to get started with greater ease. Plus, it includes all of the features you’d expect, such as expense, debt, and savings trackers, along with monthly budgets, goal setting, income tracking, budget reviews, and more.

This option also comes in a decent variety of colors, allowing you to choose one that catches your eye. You also get three bookmarks built-in, making it easy to get to the sections you’re using regularly. For convenience, there’s also a user guide, ensuring you get started on the right foot.

Do you know of any other options that should be on a list of the best budget planners available? Have you tried any of the budget planners above and want to tell others about your experience? Share your thoughts in the comments below.

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Should Couples Keep Separate Bank Accounts?

Should Couples Keep Separate Bank Accounts?

Managing your finances is one of the most important decisions you will make as a couple. The traditional view is that couples should join their assets. Combining your resources is a concrete way to show that you are joining your lives together. However, there has been more room for discussion recently. As women become more financially independent and people marry later in life, this may not be the best decision. If you are in a serious relationship, you should discuss with your partner if it is better for couples to keep separate bank accounts.

The Reasons for Separate Bank Accounts

When confronted with this question, I was very uncomfortable with the idea of opening a joint bank account. Having my own accounts gave me autonomy since I had full control of my finances. Furthermore, I was not responsible for paying down my partner’s debts or support payments. I did not like anyone else having access to my funds without permission. Separate accounts also mean that no one can track or question your expenditures.

Some have told me this is a very cynical outlook. On the contrary, I feel it is a way to protect yourself and your assets. Statistics show that nearly half of marriages fail. Often times, finances are a huge contributing factor to marital problems. In my experience, there were fewer arguments about money. At the end of the day, couples who keep separate bank accounts will have more security yet less paperwork and bitter fighting over assets if they split up.

The Reasons for Joint Bank Accounts

Over time, I came to understand that pooling your resources builds trust with your partner. Not only do you have a shared goal for your future, there is less suspicion when you have transparency. In addition, it provides a clearer picture of your financial situation. With a joint account, there are few opportunities for surprises such as hidden accounts or debts.

There are also practical reasons for opening a joint account with your partner. In case of an emergency, it removes obstacles if your spouse needs to access the money. If you are unavailable or unable to allow access, it could create unnecessary headaches and frustration. Joint accounts also streamline the process of transferring funds to your partner after death. There is a significant amount of red tape if you maintain separate accounts.

The Right Decision for You

In the end, only you and your partner know what is best for your situation. In my case, I chose to retain my private accounts while opening one joint account to pay bills. I still had full control over my own finances. However, we also shared responsibility for our monthly expenses. The sense of equal partnership and accountability created shared goals without giving up my financial independence. It also created balance since one partner did not need to ask for an allowance or permission to spend money.

I also feel that having our own spending cash prevented a lot of conflict. As long as our bills were paid, we were free to use our personal funds any way we saw fit. I was able to splurge occasionally without someone watching my every move. It allowed breathing room in the relationship and eliminated anxiety.  Money matters can be difficult to navigate as you intertwine you life with someone else. The only way to determine what is best for you is through open communication. Carefully consider all the pros and cons before you make a decision that will affect the course of your financial future.

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