Opinion: Rising Inflation Is Here, But San Diegans Have Many Ways To Cope

San Diego CA

26 February, 2022

12:37 PM

Description

By Doug Wright, Times of San Diego February 26, 2022 By all measures, current inflation rates in the United States have seen the fastest annual increase in more than 30 years, and concern rises each day as the cost of goods and services increases. The current growth rate of 7.5% in the Consumer Price Index has taken an estimated average of $200 per month out of consumers' pockets, and some of the factors causing price increases may continue for a while. Given these stresses, how can consumers lessen the impact? More careful budget planning and thoughtful spending are the best places to start. Here are some trends and tips to help understand what to expect and how to cope. Inflation may not subside soon, so it's important to re-examine your monthly budget with a longer-term focus. Emphasize savings first and look carefully for opportunities to reduce spending. Most important, remain calm, take firm control over your budget and spending, and be assured that this inflationary period too shall pass. Finally, a few thoughts on managing the impacts of rising interest rates. Although mortgage rates are already climbing, they're still relatively low and shouldn't dissuade you from purchasing a home if you find a reasonable deal and can afford it. You may also still look to refinance your home if your current rate is above 4%. Auto loan rates will trend upward, but more slowly, and should be less of a factor in your decision right now than the price of cars. Credit card rates are higher, and those indexed to market rates will move up further. So it's helpful to pay down or refinance this debt and look for savings alternatives. As always, look for ways to improve your credit score. If you are saving money, savings rates will likely be sticky with not much initial movement. But, you can protect your purchasing power and investment returns by investing in inflation-protected securities such as inflation-indexed bonds or Treasury inflation-protected securities. Seek help investing from a trusted financial advisor. Doug Wright is chief financial officer of Mission Federal Credit Union, the largest member-owned, not-for-profit financial institution exclusively serving San Diego County. Times of San Diego is an independent online news site covering the San Diego metropolitan area. Our journalists report on politics, crime, business, sports, education, arts, the military and everyday life in San Diego. No subscription is required, and you can sign up for a free daily newsletter with a summary of the latest news.