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6 Expenses on the Rise in 2022 and How You Can Save Money – The Motley Fool

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Inflation comes and goes. Knowing how to save money lasts fore…….

Image source: Getty Images

Inflation comes and goes. Knowing how to save money lasts forever.

Key points

  • Due to the pandemic, inflation has reached 7.5%.
  • Cutting costs can help you offset the impact inflation has on your budget.

As horrible as inflation may feel, it’s a normal part of the economic cycle. Economists say the current inflation rate can be blamed on a surge in consumer demand and lack of supply due to the global pandemic.

To put our current situation in perspective, the inflation rate hovers around 7.5%. The year World War I ended, the inflation rate averaged 18%, and two years after World War II, it was nearly 11%. Due to several global issues, the period between the late 1960s and early 1980s is called “The Great Inflation.”

Simply put, when Americans have money to buy things, but the “things” we want are not available or are in short supply, prices go up. At some point, either an increase in production or a decrease in demand will drive prices back down.

Granted, understanding how it works is not helpful as you stretch your monthly budget to pay more for everyday items. Here, we’ve compiled a list of things you can expect to cost more in 2022 and offer ways to save money.

1. Shelter

It’s no secret home prices have hit new highs, forcing some out of the housing market. Typically, as mortgage rates creep up, one would expect housing prices to come down, but that’s not the case this year. And that’s primarily due to a lack of inventory.

What you can do: You have several options, including buying a “fixer,” a house that fewer people are interested in. A rehab loan, like a 203(k), provides enough to pay for the house and upgrades. Or, you can wait until more homes are built, inventory grows, and prices begin to resemble something closer to “normal.” The best part of waiting is that you’ll have more time to save for the down payment.

2. Food

You can wait to buy a house, but not food. Staples, like eggs and milk, are becoming more expensive. Junk food like Coke, Pepsi, Ritz, and candies will also cost more this year.

What you can do: Limit junk food until prices stabilize. Rather than buy prepackaged food, purchase the raw ingredients to make your favorites. There are so many …….


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