What is Inflation?

 

The simple definition for inflation is that it is the rate increase in prices for goods and services over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. Inflation can sometimes be good and bad for our economy. High inflation is generally considered harmful, some economists believe that a small amount of inflation can help drive economic growth. Inflation is good when it combats the effects of deflation, which is often worse for an economy. An important aspect of keeping a good inflation rate is managing expectations of future inflation. How do we know if we’re in a recession? What happens? During a recession, the economy struggles, people lose work, companies make fewer sales and the country’s overall economic output declines. It is a period of temporary economic decline during which trade and industrial activity are reduced. The point where the economy officially falls into a recession depends on a variety of factors. It is generally identified by a fall in Gross Domestic Product (GDP) in two successive quarters. In some cases, the most affected individuals during recession are young adults in their 20s and 30s but many Americans ages 50 and older including baby boomers nearing retirement were also affected, either directly or indirectly, by rising unemployment, falling home values, and the decline in the stock market. How can I protect myself in a recession? You can prepare yourself in a recession by following simple guidelines.

 

  • Keep up and maintain your usual budgeted contributions
  • Reassess your budget monthly, cut out unnecessary expenses
  • Put up more towards your emergency fund. Increase your savings as much as you can
  • Focus on paying off high-interest debt accounts
  • Evaluate your investment choices, avoid making emotional money decisions
  • Learn and study innovative ways to make extra cash. Consider putting up projects to bring in supplemental income.
  • Build yourself, work on your Resume and show off your skills to show your employer your value.
  • Master your digital and in-person networking skills by attending networking events each month.

 

No matter what state the economy is in, practicing these healthy financial strategies can help improve your budget and opportunities and of course will help prepare yourself during recession.