The U.S. is experiencing some of the highest rates of inflation the nation has seen since the early 1980s as Americans are noticing price hikes at the grocery store, gas station and coffee shop.
The price of goods and services climbed 6.8 percent in November, according to the most recent U.S. Labor Department data. The inflation rate rose by that same tally in October. All told, inflation has risen by at least 5 percent since June.
The statistics basically mean "for every dollar you have, you can't buy the same amount of goods and services," said Vicki Bogan, a finance professor at Cornell University in upstate New York.
"At the core of this, prices are going up, so the money that you have, you can't buy as much," said Bogan, who is also an expert on household finances.
There's no true consensus from economists on when inflation may slow down, with some predicting later this year and others forecasting further out to 2023 and 2024. But even if prices continue to rise this year, there are steps Black households can take now to fend off rising inflation, Bogan told Finurah.
1. Learn New Skill to Gain Better Employment
Now might be a good time for the family's income earners to update their professional skills or learn entirely new ones, Bogan said.
That's because one solid way to combat inflation is to find a higher paying job or start working in a field that stays in high demand no matter how poorly the economy performs, Bogan said.
2. Up Your Investing Game In The Stock Market
Some Black families have investment portfolios that are mostly in bonds, but because inflation is so high right now, "the value of any bond assets are eroding over time," Bogan said. Instead, it might be time to get more aggressive and invest in individual stocks, mutual funds or exchange-traded funds, she said.
The thinking behind this strategy, Bogan said, is for a family to grow its invested money at a higher percentage than the rate of inflation. It's important for Black households to invest more right now in particular because "otherwise you're kind of losing money," Bogan said.
Read full story at Finurah here.
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