As the cost of living rises, consumers are facing tough budget choices. The three core items in their monthly budgets are housing, energy, and food. With rising prices, consumers are finding it more difficult to avoid a financial shock. However, financial advisors suggest levers that consumers can pull to help avoid the blow. Andy Baxley, a financial advisor, compares the situation to a small boat thrown into a raging storm.

Prices have jumped more than 1% from April to May

Inflation in the United States continues to escalate, with the Consumer Price Index showing that prices have increased more than 1% in May compared to April. This rate of increase highlights the brutal impact of inflation on the American economy. With prices rising faster than incomes, lower-income families have been particularly hard hit. Since a large part of their incomes goes toward buying necessities, the rising prices have disproportionately impacted them. Meanwhile, core prices rose only 0.7% from April to May, and are now 5.9% higher than they were a year ago. The current pace of growth is below the high of 6.4% recorded earlier this year.

Prices are up more than 8 percent in the United States

With the US economy stalled, inflation has been a major concern for many Americans. As prices go up for everything from petrol to food, Americans are finding themselves squeezed for money. Gas, groceries, rent, and discretionary items have all increased in price. Lower-income and Hispanic Americans are particularly struggling. US President Joe Biden is expected to make an address to the nation on the rising costs of living. He will speak at the port of Los Angeles, the busiest in the country. In addition to a higher price of fuel, US shipping companies have reported a shortage of supplies.

Lower-income households are hardest hit

Inflation is wreaking havoc on lower-income households. Food prices have risen rapidly, squeezing the budget of lower-income families. The cost of food at home has been above 1% year-over-year for 13 consecutive months, and has at times topped 4%. Even a pack of paper towels has increased to nearly $18. Lower-income households are already stretched thin, and almost all of their income goes toward necessities.

Higher-income households are absorbing price increases

While overall income levels in the U.S. have increased in recent years, many Americans are more uncomfortable with price increases. About two-thirds of households report that household expenses have increased since the pandemic began, while only about one-quarter report that their incomes have increased. For some, such as Amy Lopez, a stay-at-home mom in Knoxville, TN, higher prices are no big deal. But for others, inflation has meant sacrifices and compromises that they’ve been unable to make.

Lower-income households are delaying marriage because they can’t afford it

According to research, lower-income households are delaying marriage because they cannot afford it. This trend is especially prevalent among black women. According to a discussion paper by the Council on Contemporary Families, a nonprofit think tank based in Miami, the primary reason for delaying marriage is a lack of money. Despite the fact that black women are less likely to marry than their white counterparts, the declining rate of marriage among African-American women is a sign of growing economic inequality.

Building an emergency fund is a good idea during high inflation

Inflation is a real concern for many people today. Inflation has pushed up consumer prices by as much as 9.1% in June. Gas, housing, and food prices accounted for most of the increase in consumer prices. However, finanza.no can help protect your savings from this unplanned expense. The best way to go about building an emergency fund is to keep a portion of your savings in cash and invest the rest. Then, when you need to use the money for a major expense, you can withdraw money from your savings account.