What if you can’t ‘beat budget’ on inflation? | Smart Switch: Personal Finance

Inflation is a nightmare for the many Americans who already stretch their dollars to cover basic needs. What happens when those dollars lose value?

Your choice probably won’t be about cutting off streaming services or opting for store-brand groceries. Instead, they may have to choose between buying enough food or paying rent.

The families most affected by inflation tend to have few 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.

For example, let’s say that generations of your family have been underpaid or limited in where they can live, due in part to racist policies. So inflation makes everything more expensive.

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

“Your proximity to people with resources and wealthy people will be different depending on where you live and who you are,” says Luong. “There’s a larger context than just spending and budget.”

Whatever context describes your situation, here’s how to beat inflation if money is already tight.


Try to pay the expenses that allow 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.

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

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


If you’re having trouble paying bills, reach out for support. Luong suggests findhelp.orgthat lists local programs designed to reduce costs in many categories.

Calling 211 or visiting 211.org can also help you find assistance related to housing, health, food, and emergency costs.


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

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

They can pause or reduce payments, for example, or forgive overdue bills. Or they could lower your interest rate.

But you have to ask. And often a phone call from the patient to customer service produces faster and more effective results than an email or online form.


To overcome financial difficulties, “community is going to be important,” says Dasha Kennedy, an 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 other people can reduce housing costs. Or you can pool resources by sharing a vehicle or splitting a large expense.

To connect with caring local people you haven’t met yet, seek out libraries, faith-based organizations, and recreation centers. Or use virtual platforms like Facebook and Nextdoor.

In these spaces in person and online, you can find free or low-cost goods and services. Maybe someone gives away second-hand clothes or walks your dog while you work.

Or seek guidance. Your neighbors can point you to free nearby health resources, for example, or describe what helped them stretch their money.

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Of course, making more money also helps. If he’s already working, Kennedy recommends first trying to increase earnings through his employer. Consider working overtime or negotiating raises and role changes, she says.

Or explore parallel work, with caution. Lots of online jobs could waste your time, take your money, or misuse your personal information.

“It’s time for fraud and scams,” says Kennedy. Trust your instincts and read the reviews. Also check the websites of the Federal Trade Commission and the Better Business Bureau for tips on avoiding scams.

The most effective way to earn money? “Monetize the skills you already have,” says Kennedy. These could include anything from cleaning and organizing to writing and designing.

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

“You may not have time to build trust and reputation, so you’ll have to rely on personal relationships,” she says. Ask your friends, neighbors, and family members to promote and vouch for you.


Fights over money are exhausting. So “connect with yourself” regularly, says Miles-Mattingly. Identify what makes you feel better, whether it’s going for a walk, 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 skills.” And tough times mean tough decisions. It pays to feel grounded before negotiating a lower bill or taking on a side job.

To avoid feeling overwhelmed in times of financial stress, Kennedy tries not to think too much about the unpredictable future. Instead, he suggests “focusing on getting through the day.”


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This column was provided to The Associated Press by the personal finance website NerdWallet. Laura McMullen is a writer at NerdWallet. Email: [email protected]. Twitter: @lauraemcmullen.