What if you can’t “outbudget” inflation? | Smart Change: Personal Finance

Inflation is a nightmare for many Americans who are already spending their dollars on basic needs. What happens when those dollars lose value?

Their choice probably isn’t about cutting streaming services or opting for private label groceries. Instead, they may have to choose between buying enough groceries or paying rent.

The families hardest hit by inflation tend to be short on savings and other resources. And that lack of access to wealth may 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.

Suppose generations of your family have been underpaid or have limited housing opportunities, in part because of racist politics. Then inflation makes everything more expensive.

You may need to scrape together money to support not only yourself, but family members or community members as well. You may have to spend money and time traveling across town to the grocery store or doctor’s office.

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“Your closeness to people with resources and people with wealth will differ depending on where you live and who you are,” says Luong. “There’s a bigger context than just spending and budgeting.”

Whatever the context describes your situation, here’s how to fight inflation when money is already tight.


Strive to pay expenses that allow you to live a secure life: housing (mortgage or rent), utilities and groceries. Also, try to cover costs that help you with your work, such as B. Transport, mobile phone and child care.

The next level priorities are those that will have serious consequences if you don’t pay: taxes, child support, and insurance.

With credit cards, try to pay at least your minimum as you may need that credit access.


If you’re struggling to pay bills, you can find support. Luong suggests Findhelp.org, which lists local cost-cutting programs in many categories.

By calling 211 or visiting 211.org, you can also find support related to housing, health, food, and emergency expenses.


You can also save money by calling credit card and insurance companies, lenders, banks, cell service providers, and other companies that pay you.

With the pandemic affecting so many consumers, these companies are “a little more empathetic than before,” says Emlen Miles-Mattingly, co-founder of Onyx Advisor Network, a Sacramento, California-based support platform for underrepresented financial advisors.

For example, you can pause or reduce payments or waive overdue bills. Or they could lower your interest rate.

But you have to ask. And often, a patient call to customer service yields quicker and more effective results than email or an online form.


To overcome financial difficulties, “community will play a big role,” says Dasha Kennedy, Atlanta-based financial activist and founder of the Facebook community The Broke Black Girl.

Leaning on—or supporting—your family members, friends, and neighbors can take many forms. For example, Kennedy points out how living with others temporarily can reduce housing costs. Or you can pool resources by sharing a vehicle or splitting a large expense.

Look to libraries, religious organizations, and recreation centers to connect with supportive local people you haven’t met. Or use virtual platforms like Facebook and Nextdoor.

You may find free or low-cost goods and services in these personal and online spaces. Maybe someone is giving away thrift clothes or walking your dog while you work.

Or get advice. For example, your neighbors can point you to free healthcare facilities nearby or describe what has helped them stretch their money.


Of course, it also helps to make more money. If you’re already working, Kennedy recommends trying to increase income through your employer first. Consider working overtime or negotiating raises and role changes, she says.

Or explore side hustles – with caution. Many online performances could waste your time, take your money or misuse your personal information.

“It’s high time for scams and scams,” says Kennedy. Trust your gut feeling and read reviews. Also check the Federal Trade Commission and Better Business Bureau websites for fraud prevention tips.

The most effective way to make money? “Monetize skills you already have,” says Kennedy. These can include anything from cleaning and organizing to writing and drafting.

Assuming you start with no customers, she suggests tapping into your community again.

“You may not have the time to build trust and reputation, so you have to rely on personal connections,” she says. Ask friends, neighbors, and family members to advertise and stand up for you.


Money fights are exhausting. So connect with yourself regularly, says Miles-Mattingly. Find what helps you feel better, whether it’s walking outside, calling a friend, meditating, or reading.

When time is short, make your activity fast and remember Miles-Mattingly’s point: “People don’t have the best decision-making skills when they’re stressed.” And tough times mean tough decisions. It pays to feel centered before negotiating a lower bill or agreeing to a side job.

In order not to feel overwhelmed in financially strained times, Kennedy tries not to overthink the unpredictable future. Instead, she suggests “focusing on getting through the day.”


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This column was provided to The Associated Press by personal finance website NerdWallet. Laura McMullen is a writer at NerdWallet. Email: lmcmullen@nerdwallet.com. Twitter: @lauraemcmullen.

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