Rising Inflation – This Isn’t Our First Rodeo

Concerned About Inflation? 

5 Tips To Help You Navigate Uncertainty

Are you concerned about rising inflation?  You may notice it's become the daily headline, almost replacing "the virus".  

Inflation hasn't been a topic of conversation since 1982.  Remember the late 70's? Double digit inflation, double digit unemployment and double digit mortgage rates.  My first mortgage in 1979 was for 11.5%, and within months, the lowest rate was 13%!  And somehow, we survived then, and we will this time too.

How To Keep Your Sanity When Inflation Is On The Rise

When the economy is unsettled, the stock market gets jittery.  Investing during market volatility can be like driving during a winter storm. Your best plan of action is to focus on what you can control and keep progressing towards your destination.

And as the markets have turned a little blustery since the beginning of 2022, you might think of your financial plan as the GPS system that you can rely on to keep you on track even when it's tough to see the path forward.

5 Simple Steps You Can Take Today To Help Your Bottom Line

Here are five action steps we recommend focusing on as we wait for the rising inflation storm to pass … and prepare to weather the next one.

1. Review Your spending.

The single biggest influence on the success of your financial plan has nothing to do with the markets. It's how you manage your household budget. As simple as it sounds, age-old advice like "live within your means" and "save more than you spend" really do provide a solid blueprint for building wealth, handling rising inflation and enduring market volatility. And if you don't currently have a budget, now is a great time to set one. Pay special attention to any recurring charges that you barely used in the past year, like streaming services, magazine subscriptions, or club memberships.

2. Keep Your Debt In Check.

Are your credit card bills for the month a little higher than they usually are? That's not unusual right after the holidays. Hopefully, you made a budget for your gift-giving and travel and managed to stick pretty close to it. If not, review your new household budget and look for ways to pay down those and other household debts rather than kicking the can -- and the growing interest payments -- into next month. Whether the market is up or down or inflation is eating away at your wallet, when your next statement rolls around, any charges you don't pay off this month are going to be waiting for you.

3. Put Your Savings On Autopilot

Deciding whether or not to invest when the market is slumping can be very nerve-wracking. In part, that's because trying to time the market is nearly impossible. A much more dependable strategy is to make automatic contributions to your investment and savings accounts every month. Based on the long-term goals that we've discussed, we can adjust how those contributions are used as we analyze various options for rebalancing, diversifying, and growing your portfolio.

4. Your Internet Usage.

Technology allows us to be more transparent with our clients and keep them involved in the planning process throughout the year. But just because you can check your account balances at all hours doesn't mean that you necessarily should. Likewise, constantly refreshing your social media and news feeds for the latest financial info is only going to make normal market jitters feel like an earthquake.

According to a study by Charles Schwab, from 2000–2019 declines of at least 10% occurred in 11 years. Annual returns in six of those years were positive, with an average gain of approximately 6%.

In other words, market declines are rarely cause for alarm; they’re just a part of investing. And while past performance is no guarantee of future returns, what goes down tends to go back up, especially when you zoom out and take in your full financial planning timeline.

5. Your True Wealth™ Plan

A solid financial plan guides you toward your best possible life at every stage of your life. And as that vision of your big, bold, life changes, your plan should be able to change with it, regardless of what's going on in the markets or the world.

Reach out to schedule a review of your financial plan. If you don't have one, or haven't updated an old one in a while, now is a great time to see where you stand.

Rather than worry about what may or may not happen on Wall Street tomorrow, let's discuss the life transitions you know are coming, the goals you want to achieve, and how our True Wealth™ Planning process can help prepare you for the next unexpected blip on your radar.  You can't control rising inflation or a jittery stock market.  But you can control your behavior and how you respond.

About the author 

Therese Nicklas

Therese Nicklas is a CERTIFIED FINANCIAL PLANNER™, Certified Money Coach(CMC)®, and Certified Success Principles™ Coach. She specializes in helping executive women who are at a crossroads and feel uncertain about their next steps. By empowering them with smart money strategies, they learn how to build their new big, bold life with certainty, clarity, and confidence. She is passionate about inspiring women to design a fulfilled, intentional life. “True wealth – true financial freedom – is being free to focus on the things that matter most to you – what money can’t buy.” Her motto – “live your life by design and not by default”.

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