Consumer Alert: Inflation is skyrocketing! Have you bought your Series I Treasury Bonds yet?
ROCHESTER, N.Y. (WHEC) — Inflation is skyrocketing. What can we do about it?
I’ll start with a story about my childhood.
When I was a kid, my mom was always searching for ways to trim the budget. Toilet paper was one of the ways she did it. She bought generic, one-ply toilet paper that I hated. I remember in grade school thinking that when I graduated from college and got a good job, I was going to buy Charmin. To this day, I still love Charmin. But as soon as prices rise, I ditch the Charmin and buy generic.
I’m not alone. When inflation hits, consumers begin to substitute with less expensive goods.
Think about it. When you’re in the grocery store, you bend down and get the generic on the bottom shelf rather than the name brand at eye-level. And when the bureau of labor statistics calculates inflation, it takes that into account.
Even so, we learned today that the Consumer Price Index rose 6.2 percent from October of 2020. That’s astronomical. It’s the biggest annual gain in more than 30 years. Keep in mind that government bean counters like for annual CPI to be about 2 percent. But the cost of food alone is up 5.3 percent over a year ago.
Here’s where things get really controversial. Some economists believe that when the government adjusts for consumer behavior, it’s fudging the numbers to make inflation look less bad. They think when we look at inflation, we should compare apples and apples – the cost of Charmin last year versus the cost this year. If we accepted the argument of those economists, the inflation numbers would look even worse.
That said, inflation may be around longer than The Fed has been telling us. For months, The Federal Reserve has said inflationary pressures were transitory. Now, we’re not so sure. So what can we do? With a little help from Michelle Singletary of the Washington Post, here’s Deanna’s Do List.
• Substitute. Substitute. Substitute. For example, the price of beef and bacon is up more than 20 percent over last year. Substitute chicken which has increased less than half as much. Buying a whole chicken rather than parts is even cheaper.
• Take a look at recurring expenses like your streaming services and mobile plan. Look at your cell phone bill and cut out anything you don’t use like insurance, emergency roadside assistance or enhanced voicemail. Call your carrier and threaten to jump ship, but you have to know competitor’s rates before you call so you have the power of negotiation.
• If you’ve sacked away a little cash, consider taking advantage of inflation. Financial planners like Michelle Singletary recommend Series I Savings Bonds issued by the Treasury Department. They allow you to earn a combination of a fixed interest rate and the rate of inflation. You have to have a treasury direct account. Click here to set one up.
• Delay purchases of things you don’t need.
We have no control over inflation. But we can control how we manage it. I still really do like Charmin. But in times like these, I can’t afford to flush more money down the toilet than i have to. My mama was pretty darn smart.