The price of stuff is going up, which may be the case for some time. Do you also know about these other components of inflation?
Shrinkflation. Companies reduce the size or quantity of their products while charging the same price or even more. One example is paying the same for less sheets of toilet paper (and smaller sheets!). Companies have been doing this for years because people are more sensitive to changes in price than to changes in quantity.
Skimpflation. Instead of simply raising prices, companies skimp on the goods and services they provide. Shoddier service is the result of a labor shortage and rising business costs. For example, it’s now taking longer for packages to be delivered.
The key to coping with inflation is to plan for it.
- Follow a budget. It’s really important to understand where your money goes and to cut out unnecessary expenses.
- Cut back. Try alternate grocery stores, use coupons, eat out less. Look for free and cheap entertainment options.
- Continue to save and invest your money, especially for retirement. You don’t control economic conditions, but you do control your spending and saving habits.