Inflation is a nightmare for the many Americans who already stretch their dollars to cover basic needs. What happens when those dollars lose value? (Meanwhile, in these parts, Philippine inflation in June 2022 surged to the highest mark in nearly four years at 6.1 percent, according to the Philippine Statistics Authority—Ed.)
To adapt, people are probably not simply choosing between cutting their streaming services or opt for store-brand groceries. Instead, they may have to pick between buying enough food and paying rent.
The families hit hardest by inflation typically have little in savings and other resources. And that lack of access to wealth can be rooted in a history of inequality, says Phuong Luong, a Massachusetts-based certified financial planner and founder of Just Wealth, a financial education and consulting firm.
For example, say generations of your family have been underpaid or limited in where they can live, due in part to racist policies. Then inflation causes everything to become more expensive. You may have to scrape together cash to support not just yourself, but also family or community members. Perhaps you have to spend money and time traveling across town to the grocery store or doctor’s office.
“Your proximity to people with resources and people with wealth is going to be different depending on where you live and who you are,” Luong says. “There’s a larger context than just expenses and budgeting.”
Whatever context describes your situation, here’s how to combat inflation if money is already tight.
Prioritize essentials
Aim to pay for expenses that enable you to live safely: housing (mortgage or rent), utilities and food. Also try to cover costs that help you work, such as transportation, cell phone and child care. Next-level priorities are those that trigger major consequences if you don’t pay: taxes, child support and insurance.
For credit cards, aim to pay your minimum at least, because you may need that credit access.
Connect with your community
To overcome financial struggles, “community is going to be major,” says Dasha Kennedy, Atlanta-based financial activist and founder of The Broke Black Girl Facebook community.
Leaning on—or supporting—your family members, friends and neighbors can take many forms. For example, Kennedy points out how temporarily living with others can lower housing expenses. Or you can pool resources by sharing a vehicle or splitting a large expense.
To connect with supportive locals you’ve yet to meet, look to libraries, religious organizations and recreation centers. Or use virtual platforms like Facebook and Nextdoor.
In these in-person and online spaces, you may find free or inexpensive goods and services. Maybe someone will give away secondhand clothes or walk your dog while you work.
Or seek guidance. Your neighbors may point you toward free, nearby health resources, for example, or describe what’s helped them stretch their money.
Profit from your skills
Of course, making more money helps, too. If you’re already working, Kennedy recommends first trying to increase earnings through your employer. Consider working overtime or negotiating raises and role changes, she says.
The most effective way to make money? “Monetize skills you already have,” Kennedy says. These could include anything from cleaning and organizing to writing and designing.
Assuming you start without clients, she suggests tapping your community once again. “You may not have the time to build trust and reputation, so you’re going to have to rely on personal relationships,” she says. Ask friends, neighbors and family members to promote and vouch for you.
Mind your mental health
Money struggles are exhausting. So regularly “connect with yourself,” says Emlen Miles-Mattingly, co-founder of Onyx Advisor Network, a Sacramento, California-based support platform for underrepresented financial advisors. Identify what makes you feel better, whether it’s walking outside, calling a friend, meditating or reading.
If time is tight, make your activity quick, and consider Miles-Mattingly’s point: “People, when stressed, don’t have the best decision-making abilities.” And hard times mean hard decisions. It pays to feel centered before negotiating a lower bill or agreeing to a side job.
To avoid feeling overwhelmed during times of financial stress, Kennedy tries not to overthink the unpredictable future. Instead, she suggests “focusing on getting through the day.” AP