Inflation Confidence
When did we all start worrying about Inflation? For many people, it was November 10, 2021 when the Bureau of Labor Statistics released the latest CPI numbers. You’ve probably been reading all about it in the news. For clients at Audax Wealth Management, LLC, this isn’t such a big deal. Historically AWM client plans are adjusted for inflation that is higher than the national average. I build in very conservative assumptions into client’s financial plans. I’ve also been talking about inflation for the past year and half. Since Thanksgiving is coming up, here is some food for thought as you sit around the dinner table with your family, broken down into bite-sized pieces.
Why inflation matters to you….
The price of your retirement just got more expensive.
The price of oil and food in particular just got more expensive.
Your dollars now are not going to go as far in the future.
What can you do about it?
If your retirement just got more expensive, this means you need to SAVE MORE to compensate for the gap between what you have and what you need. Look at your investments to make sure that they line up with your goals. You’ll probably need to make some adjustments. Bonus bite: did you know that a good savings plan is also a tax strategy?
If oil and food are more expensive, consider swapping out. Drive less, walk or bike more. Eat more vegetables than beef. Get creative on how you can make your pennies stretch further.
So you can’t have it all right now. I’m currently reading a book by Greg McKeown called Essentialism: the Disciplined Pursuit of Less. We can get so bogged down with wanting all the “things” in life, whether talking about career or materialism. When we focus on what is truly important, many of these superfluous things disappear. What is important to you now? How can you focus all of your time and attention one or two priorities in order to make your dollars go further in the future?
Other lifestyle changes might include
Paying down your debt now before rates go up
Beefing up that emergency savings account for your business and your personal life. How many months would you need to ride out if you lacked customers or lost your job? What is the bare minimum that it takes to feed, house and clothe your family every month?
Sticking to a budget - making sure that every dollar has a job to do
Get a side hustle! Even though wages have been increasing, some experts fear that the increase in wages isn’t enough to compensate for increased prices
Did I mention, saving more?
Getting professional financial advice to help you navigate through these waters. We’ve been here before, we’ve seen volatile markets, and we can help you with a plan to ride out the wave.
Focusing on your mental and physical health through what might be another volatile few months.
What not to do….
If you know me, you know that I’m against jumping on any trend just because your barber, neighbor, or friend of friend says to do it. What works for your acquaintance does not work for your personal situation. Do not buy a risky investment with dollars that should be set aside for an emergency, a retirement, or a short-term goal. And PLEASE make sure that you seek advice from a financial professional before making a significant change to your financial plan.
It’s ok to buy in bulk at Costco, but do not put gasoline in unapproved containers or leave it in your garage. Use your head.
Why you shouldn’t worry….
You’ve been here before. Many people were unprepared at the beginning of COVID, and it caused mental and fiscal stress. By focusing on small changes in your financial plan now, you’ll be better prepared for anything that comes your way.
Contact me for a no-obligation consultation if you would like to discuss your own financial plan. I’m here to help! Email me at cgamache@audaxwealth.com
