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Is your budget feeling stretched thin right now? It’s likely due to inflation, which is affecting your money in a few different ways.
Key points
- As of mid-June, the inflation rate was up by 8.3% year-over-year, and it’s having a significant impact on most people’s finances.
- The cost of groceries, from fruit and vegetables to dairy products, is up by over 11% — which may be busting your food budget.
- Your savings rates, borrowing power, and the value of your cash may also be feeling the inflation burn.
Over the last six months, the talks have shifted from the unstoppable housing market to how inflation is affecting the economy — and for good reason. As of mid-June, the inflation rate in the U.S. had grown by about 8.3% compared to the year prior, which is a huge leap compared to what we’ve seen in years past. In turn, the prices of everything you buy and the utilities you pay for have gone through the roof.
That alone is taking a big toll on people’s finances. But while inflation is causing everything we buy to have a higher price tag, that’s hardly the only effect it’s having on your budget. Inflation is affecting your money in more ways than you may realize. If you’ve been wondering why your bank account balances haven’t been going as far recently, here are six ways inflation is affecting your money.
1. Your food budget is being busted
Right now, essentials cost a lot more than they used to, and it’s likely having a big impact on your budget. While supply chain issues have played a part in the rising costs of these types of essentials, much of it can be attributed to inflation.
According to recent BLS data, the cost of food at home — items like fruit and vegetables, meat, dairy products, and other groceries — is up by 11.9% compared to last year. What that means is that millions of Americans are feeling the burn when filling up the grocery cart. Your grocery budget isn’t stretching as far — and you may even be dipping into other parts of your budget to fill up the pantry.
But it’s not just groceries that are more expensive compared to last year. If you’re occasionally ordering food away from home, either at restaurants or takeout, you’re paying about 7.4% more on average compared to 2021. That’s the highest jump we’ve seen since 1981, when the prices for food away …….