As inflation reaches a 41-year high, Americans are dealing with rising prices at grocery stores, gas stations, and shopping centers, and financial experts are stating that the nation is headed for a recession.
As food prices soar and gas prices hit $5 per gallon last year, inflation has soared in the last year, reaching 8.6 percent in May, the highest level since 1981. This has put a strain on many Americans’ wallets.
However, many now assert that the United States is already in a recession as a result of the turbulent end to the second fiscal quarter last week, including financial advisor Dawn Dahlby.
In order to prepare for the impending economic downturn, Dahlby, who has been helping people manage and invest their wealth for 22 years, advised people to take action immediately.
A commitment to change, according to Dahlby, who founded Relevé Financial Company more than 20 years ago, was the key to surviving the recession.
She urged Americans to organize their shopping trips, pare down their outings, and make a conscious effort to save money at the pump.
Although a recession would be difficult, according to Dahlby, Americans should view it as a passing phase that offers numerous opportunities for saving and investing.
HOW CAN I REDUCE MY FOOD BILL?
Meat and poultry prices increased by 14.2% over the past year, cereal prices increased by 11.6%, and the cost of fruits and vegetables increased by 8.2%.
The U.S. Bureau of Labor Statistics (BLS) published a study last month that revealed that in 2020, the typical American household will spend $411 per month on groceries.
Dahlby advised people to plan out their trips to the grocery store and limit how frequently they went out in order to cope with the rising prices.
Dahlby advised, “You need to make a thorough assessment of what you have and what you need for the month.” “So many of us buy twice as much as we actually need.”
To take advantage of opportunities for savings, she also advised customers to research the loyalty programs offered by their favorite retailers.
ARE THERE ANY OPTIONS FOR CONTROLLING THESE GAS PRICES?
After the nation’s average gas price reached $5 per gallon last month, Americans are experiencing some of the biggest aches from inflation in their gas bills.
The west is still dealing with high costs, with California leading the pack at $6.14 a gallon, even if prices have slightly decreased, averaging $4.72 on Friday.
Given that gas prices are frequently beyond the control of the average person, Dahlby said dealing with them can be challenging.
She claimed that, wherever possible, she advises her clients to just fill up their gas halfway once every week.
“This helps them save money since they know their travel options are limited and they have to schedule their travels accordingly,” says the author.
Additionally, she advised drivers against making special efforts to find the lowest gas station because they might end up using more petrol than they intended to.
Don’t travel ten miles just to save a dollar at the pump, she said.
DO I NEED TO QUIT EATING OUT?
Spending less on meals out is a crucial strategy for people to save money before the recession hits.
According to the BLS, the average American spent around $2,792 on eating out last year, and about $1,200 on fast food.
Dahlby recommended people to go out earlier than usual to take advantage of restaurants’ happy hour specials, which typically run from 4 to 7 pm, rather than giving up eating out entirely.
Dahlby recommended that diners choose to split the tab while taking advantage of the bargains because the food is typically offered at a discount.
Additionally, she advised against overpaying on alcoholic beverages because that is where the cost really adds up.
WHICH EXPENSES CAN I REDUCE THAT ARE NOT NECESSARY?
Americans are seeking for methods to save money, according to Dahlby, who said that reviewing your recent invoices can show you where you can make savings.
Everyone has, the financial counselor claimed, spent money they didn’t have to, whether it was on a daily $7 cappuccino or a trip to buy one item that turned into an impulsive shopping spree.
According to a recent poll by the online retailer Sickdeals, Americans made impulsive purchases this year at a rate of $314 per month on average, up from $276 in 2019 and $183 in 2020.
Clothing was the most popular impulse purchase this year, with about 35% of customers reporting doing so. Food spending, purchases of furniture, clothes, shoes, and technology came in second.
People need to learn to break this behavior, according to Dahlby, and she urged those who were having trouble to instead use the many retail pick-up options that have grown commonplace since the outbreak.
The ability to order what you require and pick it up without ever entering the store is much easier, she said. “That way, temptations and impulsive purchases are avoided.”
In order to save money, she continued, consumers should be prepared to cancel subscription services and memberships to services they don’t immediately require.
HOW DO I CONTROL INFLATION’S STRESS AND A LOOMING RECESSION?
Dahlby admitted that despite all the advice, individuals can still feel worried and upset about the economy, but they should view the impending slump as an opportunity.
This is an opportunity to research savings accounts, investment opportunities, and tax-saving strategies, she said. We should concentrate on the things we can control since anxiety arises from feeling powerless.
She compared the impending economic downturn to flight turbulence.
“Turbulence makes you nervous and the plane trembles, but it passes quickly, and you’ll arrive where you’re going.”