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July 12, 2021

Smart strategies to fight back against inflation

  • Pandemic-related shortages are behind recent price spikes, and may ease as the economy continues to reopen.
    • By LIZ WESTON
    NerdWallet

    Few economists predict we'll return to the double-digit price increases of the late 1970s and early 1980s . But knowing some of the ways consumers coped back then — and how things are different now — can help you formulate a plan to deal with rising prices.

    First, a primer: Inflation shrinks your purchasing power, so you need more money to buy the same goods and services. When inflation averages less than 2% , as it did from 2010 to 2020, it would take more than 35 years for prices to double. When inflation averages 5%, which was the annualized rate reported in May, prices would double in less than 15 years. That is a huge deal if you live on a fixed income or are trying to calculate how much you'll need in retirement.


     
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