A customer purchases lemons at a supermarket on April 12, 2022 in San Mateo County, California.
Liu Guanguan | China News Service | Getty Images
Federal Reserve Chair Jerome Powell may have said it best when he addressed the public at a Wednesday press event following the Federal Open Market Committee’s half-point rate hike.
“Inflation is much too high,” he said. “We understand the hardship it is causing, and we’re moving expeditiously to bring it back down.”
The Fed is raising interest rates to rein in the economy as consumers grapple with the largest price increases seen in 40 years. Inflation is starting to have an impact on people’s spending expectations over the coming months, with 61% of Americans saying they’re worried about their financial situation, according to a survey of more than 1,000 adults conducted by Toluna from March 23 to 29.
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Many Americans now expect they’ll have to spend more on a range of purchases, from personal care and home improvements to experiences such as vacations.
“Just like any other time you have a change in situation, such as a change in your job or you’re planning to buy a home, it’s a great time to review your expenses for the past three to six months,” said Roger Ma, a certified financial planner, founder of New York-based Lifelaidout and author of the book, “Work Your Money, Not Your Life: How to Balance Your Career and Personal Finances to Get What You Want.”
How to adjust
Doing such an audit of your recent spending can help you ensure that you know where your money is going and recalibrate if it’s being directed away from your financial goals.
Because inflation is pushing up prices so rapidly, Ma suggests both checking in with your spending and revising your budget frequently.
“Plan it out a couple of months at a time,” he said.