Handling High Inflation
Alex Morton 02/01/2023
2 Minutes

Have you looked at your grocery receipt lately and wondered how it cost so much more to buy the same things you get on a regular basis? What about the cost of your monthly bills, are they up too? 

Slow and steady inflation is an expected part of a healthy financial system, but high inflation means high prices, rising interest rates, and lots of concerns about the best choices for our financial future.

Inflation Refresher - Inflation is the value of currency dropping over time. There are a lot of interesting economic concepts that detail why this happens, but ultimately if inflation happens too suddenly it can put a huge burden on the consumer.

Nobody likes seeing the price of their favorite cereal go up, and it’s even worse when the price of everything else goes up along with it. But that's the reality of high inflation. When the dollar is valued less, prices everywhere are going to rise.


What You’ve Saved

Budgets are hit hard during high inflation, especially for those that need to count every dollar in order to get by. If high inflation puts you in a tight financial squeeze, the best way to respond is to take a deep look at your spending and find non-essential, flexible expenses you can cut. Food is essential, caviar is non-essential—hobbies are flexible, and houses are non-flexible.

You might find things to cut that you won’t miss, like unused online subscriptions, greasy fast food, or forgetting to go to the gym. You may even consider cutting things you enjoy like YouTube without ads and unlimited data phone plans.

These are all good ways to start cutting your costs in order to defend yourself from inflation. But is there more you could do? Well wonder no more friend, MCT members have access to the "My Budget" tool when they sign into their account on their Online or Mobile banking app. This tool allows users to set savings goals for specific reasons like a house or vehicle and receive notifications of their progress toward their goal. You can see your spending categories to see how much is going to groceries, utilities, and many other things, and set spending targets for each category to avoid overspending. These are just a couple of examples of how our free and easy "My Budget" tool can help you. 


What You’re Worth

A big problem with high inflation is our expenses get bigger, but our wages don’t. In an ideal world, our wages would automatically increase as the dollar loses value, but companies are not required to raise wages to match inflation (and often don’t). So we have to bear the burden of higher prices until our economy evens out.


You can also find extra forms of income to increase your budget. This is often harder and takes longer than cutting expenses, but finding extra sources of income can strengthen your budget while making fewer cuts.

And it could be a good time to consider earning more money by doing something you’re passionate about on the side. If you can comfortably handle rapidly rising prices, you could probably risk doing your stand-up at an open mic, send that novel to a publisher, or make your reality tv show tryout tape.

While we have little control over when inflation will strike, we can control how we respond to it. High inflation and rising prices are a bummer for everyone but do what you can to turn those overpriced lemons into reasonably-priced lemonade.