Consumer Price Index Rises 5.4% in July as Americans Continue to Grapple With Inflation
by Maurie Backman | Published on Aug. 14, 2021
Inflation is still going strong. Here's how you can make it hurt a little less.
If it seems like the cost of goods and services has been higher than normal for several months, well, there's a reason for that. Inflation has not eased since soaring during the spring. In July, the Consumer Price Index rose 5.4%, in line with June's reading and matching the largest increase since August of 2008.
On the one hand, July's numbers matched economists' expectations, so that's a good thing in theory. But it still doesn't help Americans who live paycheck to paycheck and are struggling to make ends meet.
If inflation is wreaking havoc on your budget and causing you to dip into your savings account or rack up debt, do what you can to fight back. Here are some steps to consider taking.
1. Rework your budget
You may need to cut back on spending in certain expense categories to compensate for essentials like groceries and gas costing more. Look at your budget and see where you can make changes. For example, monthly subscriptions like a gym membership can rack up. If you're not locked into a contract, you may want to shed that expense for the time being, if it's not essential for you.
2. Keep a close eye on your credit card bills
Some people don't check their credit card statements until the end of the month. But during periods of inflation, it's important to keep close tabs on your spending. Make a point to check your credit card statements each week, and if your balances start climbing, make an effort to start cutting back.
3. Get a better credit card
If your credit card isn't rewarding you generously for everyday purchases, then it's time to get yourself a new one. Scoring extra cash back on the things you have to buy will help offset some of your extra costs.
4. Pick up a side hustle
Inflation may be making it difficult to stretch your paycheck. If that's the case, it may be time to get yourself a second gig -- one that will buy you more financial wiggle room while inflation runs rampant. The good news is that many side hustles might suit your schedule. If you can't commit to preset hours, you could sign up to drive for a ride-hailing service. Or you could look for a flexible data entry or telemarketing job you can do from home.
Unfortunately, the high levels of inflation we're seeing today could continue for months. A big reason goods are costing more is that many supply chains were disrupted during the pandemic, and now they're having a hard time keeping up with growing demand. Once those supply chains do catch up, prices should start to normalize. But until then, do your best to keep inflation from hurting your personal finances on a long-term basis.
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