In terms of the economy, many people get too comfortable in the position they’re in. Most aren’t always expecting the worst to happen, which can put them at danger to be affected worse by economic tragedies.
This is why the latest changes in our economy have devastated so many individuals. Suddenly, prices of everyday items have been spiked so high that many families find themselves short on funds for the things they commonly need.
If you’ve been doing any shopping lately, you’ve most likely realized that products you regularly buy are at higher prices than usual. The cost of daily necessities that households constantly rebuy have skyrocketed.
What’s worse is that the availability of many products has also plummeted. You’ve probably noticed reduced stock of important everyday items such as fruit, vegetables, bread, paper towels, toilet paper, and more.
It’s important to know what steps you can take to avoid being affected by price increases and shortages, and how you can deal with the changes in the economy once they’ve already happened.
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The Current State of the Economy
One of the main reasons these changes in our day-to-day life are happening is because of inflation. Inflation refers to the rise of prices throughout a certain period of time. Currently, the inflation rate is at 8.5% – the highest it’s been in four decades.
The price tags on used vehicles have risen by 40.5% within the past year. Gasoline prices follow closely with a 40% surge. Transportation costs are 20.8% more than they were last year. Household energy costs have increased by 14.7%.
So, what does this mean for the economy? For consumers, this means that the value of your money decreases. When the value of your money declines and prices rise, you won’t get as much for your money during inflation.
For example, if you go to the store and have a spending limit of $100, you’ll be able to get more items during a time with low rates as opposed to a time with high inflation rates due to the decrease of monetary value and increase of cost.
What Caused the Prices to Soar
During these times with high inflation rates, the price of pretty much every item has soared. You may be wondering why inflation rates are so high right now, considering it’s higher than it has been in 40 years.
One big role in the skyrocketing inflation rate is COVID-19. It’s no secret that this global pandemic has had drastic effects on the economy. The policies dealing with it have forced people out of work, devastating families and businesses worldwide.
Inflation is caused by a high demand for an item with low supply. Many things have been in low supply lately because of the effect the global pandemic has had on the supply chain.
A significantly lower amount of people are working than before, causing supplies to dwindle. Over 9.6 million people lost their jobs due to shutdowns and precautions following the start of the Coronavirus pandemic.
Many businesses are also having a difficult time finding people to hire for work, despite short-staffed businesses displaying their eagerness to get people back into the workplace.
Since the pandemic ruined the financial stability of many families, the current inflation rates on top of being without work are creating a very dire situation for many people across the world.
Certain political events also have effects on the supply chain and inflation rates. The current state of the world and the conflicts between two countries that are important global exporters is one example.
The war between Russia and Ukraine has and will affect global inflation due to their impact on the supply chain. The two countries together are main exporters of wheat, fertilizer, oil, and many different types of minerals.
Inflation can be caused and increased by a variety of different situations. The inflation rates lately have risen due to global conflicts and the COVID-19 pandemic, both of which have had drastic effects on the supply chain and product demand.
The costs of basic necessities such as rent, electricity, water, gas, and more are at a much higher rate than lots of people can afford, even working a full time job. So many people are struggling to survive with the current economic situation.
The poverty rate across the world has risen from 7.8% to 9.1%. Inflation and high prices are a major change, especially for lower income households. Preparing for these times by stocking up on necessities strategically is the best way to avoid finding yourself in a tough survival situation.
How the Inflation Surge Affects Your Prepping Efforts
To avoid becoming affected by inflation in the future and to lessen your stress and struggle during the current times, you have to always stay stocked and prepared for the worst.
One day, your financial situation may become so bad that you can no longer afford to buy certain groceries. In this case, it would be best to have a backup stock of the things you no longer can afford.
Your supplies should be full of nutritious foods that your family eats often. For example, you should have things like granola, dried beans, oats, etc. You’d also need to stock up on other things that would raise in price during high inflation periods.
These things would be other necessities for your family such as medicine, soap, toilet paper, paper towels, water, etc. One thing that lots of people are now struggling to pay for is gas.
Gas prices are soaring during these times, and many families are having to significantly cut back on their gas usage. Search for cheap gas near you and stock up if possible in case inflation gets any higher.
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However, many people don’t already have a survival stock in their home to keep them and their family supplied through tough money times. Trying to start your stock during times with high inflation rates will decrease how much supply you’re able to get with your money.
Another concern with stocking up during this economic state would be shrinkflation. Shrinkflation is where the prices of products rise as usual during inflation, but the amount of product you get decreases.
One example would be toilet paper. Companies will raise the prices on a pack of toilet paper, but sell fewer sheets in a roll than they did before the inflation hit. They do this to make a higher profit by using less material, making it more expensive, and blaming it on inflation.
Some companies will also decrease the amount of product in an item, such as a bag of chips, but keep the price the same. Doing this gives the consumers the illusion that those items aren’t being affected by inflation, so they’ll be more likely to buy them since they’ll be cheaper than the competing brands.
Because of shrinkflation becoming a quickly growing issue, you’ll need to buy even more of certain stock to have a sufficient amount of food and other survival items for yourself and your family.
If you don’t already have supplies stocked up, don’t worry. There are still ways to make sure you can be prepared to keep you and your family stocked up, despite prices being higher.
Ways to Prepare for Events in a Bad Economy
Living in such financially unpredictable times can be stressful to everyone. The biggest priority for most people is keeping their family and themselves safe and healthy throughout all kinds of obstacles.
If you are unprepared, inflation may put the health of you and your family in danger. With skyrocketing price tags and no backups on food, water, and other necessities, inflation can cause panic in lots of families.
Those who are already financially struggling or who don’t have backup stock will be impacted even worse than others when inflation strikes. Just to be safe, all families should have ways to keep themselves afloat during financial struggles.
The first way you’ll be able to afford the necessities of your family is to use coupons. Many stores have programs where you can sign up to get various benefits, such as coupons and other rewards.
You may also want to check the Sunday paper and see what kinds of coupons you’ll find in there, as newspapers more often than not have multiple things you can use to save money on your next shopping trip.
Often, you’ll find coupons for local shops or grocery stores for a variety of things, such as food, over the counter medication, toiletries, and more. Look out for anything that seems like it would be particularly useful for the needs of you and your family.
There are apps and browser extensions that you can download that are specifically designed for helping you save money when shopping. Some examples of these apps include Honey, Rakuten, and Dosh.
Honey is a browser extension that searches the Internet for coupons and gives you cash back whenever you shop online. When checking out, a pop up will show you how many coupons it found.
Once you allow it to try the coupons out, it will select the one that gives you the highest discount. Rakuten is a similar app and browser extension that, like Honey, finds coupons for online purchases.
Rakuten also offers different amounts of cash back on a variety of websites. Dosh is an app where you insert your card information and it sends you cash back on its own. This app works for a plethora of retailers, including shopping, restaurants, and hotels.
If you’re in a pinch, one way to be efficient with your coupon usage is to plan your shopping trips around what you have coupons for. Find different ways to incorporate the items you have discounts for into regular everyday life, even if they’re not products you’d typically buy for yourself and your family.
You can also check the websites of certain online retailers to see if there are any sales or deals going on in store or online. Buy one get one free type of deals are another thing you should look out for, as this will help you get more supply for the same amount.
Another great way to prepare is to grow your own food. Starting a garden full of fresh, nutritious food that you and your family love will help keep you all nourished without breaking the bank.
Research which plants grow well in your specific region, and be aware of the season. Make sure you don’t plant winter crop seeds that are supposed to be sewn in the summer. The climate and soil in your area is important in planning what foods to grow, so keep that in mind while starting your garden.
Keep an Eye Out for Hyperinflation
Hyperinflation is rapidly growing, out of control inflation rates that cause everyday items to go far beyond regular prices. An increase in prices over 50% monthly on things like eggs, bread, gas, and more would be considered hyperinflation.
The best way to look out for hyperinflation is to look at how rapidly the inflation rates are growing. If you notice prices changing to much higher rates over the course of a month, it’s time to start preparing for hyperinflation.
To start preparing for the possibility of hyperinflation, pay attention to the goods you’re stocking up on. How you spend your money will determine if the needs of you and your family are met when prices are so high that things you need may become unattainable.
Make sure you’re buying foods and other products that have a lengthy shelf life. Doing this will help keep you in supply of items that you’ll always be able to use, in the event of a long, hyperinflated state.
You should also stock up on necessary medicine for your family. So, if one of your family members has a prescription for a medical condition, ask your doctor about buying the prescription in bulk so that you can be prepared.
If hyperinflation hits, those who need prescriptions would find themselves in a dire situation if the prices of their medicine rose to a price they could not afford. Once the prescription runs out, it could put the patient in danger of a medical crisis.
Stocking up for inflation, whether it’s hyperinflation or not, is important to maintaining the quality of life of you and your family even in the most difficult economic times. You can make sure that you’ll be able to keep you and your family prepared by following these steps and staying calm.
Until Next Time