| Inflation remains a hot topic.
In fact, rising inflation has Americans worried about their purchasing power and, for many, those retirement plans.
A recent survey by Country Financial revealed Americans are noticing increased prices due to inflation and anticipate altering their personal spending. As a result, 88% of those surveyed expressed a high level of concern for inflation, which is held across all age groups, racial and ethnic groups, and income levels.
As inflation impacts everyday life, Americans are being forced to cut back spending as the holiday season approaches and postpone costly plans that have been in the making as the country recovers from the pandemic. For instance, 48% of those polled say they will cut back on restaurant dining and take out, with an additional 29% of Americans saying they will purchase less clothing, 20% canceling or putting off travel plans altogether, and 13% planning to drive less.
CNBC reporters Lorie Konish and Michelle Fox spoke with some financial experts who offered strategies people can take to try to stay ahead of rising costs. Additionally, CNBC's Kate Dore's story outlines how rising inflation may lead to higher tax bills.
As for an inflation hedge, now is a great time to review your portfolio to make sure your investment allocation is set up to combat a decrease in purchasing power, the experts say.
Several experts urge individuals to review their assets and to stay invested in equities. The stock market tends to beat inflation given its rate of return, although growth may be slowed during inflation periods. Since inflation is typically considered a result of a strong economy, experts suggest considering cyclical companies, which follow the cycles of an economy. That means sectors like industrials, energy and consumer discretionary.
Other inflation hedges are gold, which is near five-month highs, and cryptocurrency.
They also suggest adjusting income expectations and finding ways to negotiate debt. Ideally, your income should go up at the same pace as inflation. If it does not, you may have to pare back your spending.
Meanwhile, a great way to combat rising prices is to fix your costs. To that end, some financial professionals urge people to refinance their mortgages at 15- and 30-year fixed rates. In addition, it's important to refinance or pay off other debts you may have.
People should expect to continue these various money strategies well past the winter season, as economists predict inflation will be here to stay in 2022.
For more cool stuff like this, check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. |
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