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Katia Chesnok is a Latina money expert and coach, and the founder and content creator of Economikat, a personal finance education platform. She teaches Latinx all things money, empowering them to make more, save more, work side jobs, and invest to build wealth.

We’ve all seen the price hikes, from groceries to gas, it feels like life in general has only gotten more expensive, but our personal finances haven’t seen a similar boost. As we know, inflation will silently destroy our monthly household budget, but we cannot avoid buying daily necessities. Today, the inflation rate is 9.1 percent, a rampant level not seen in 40 years. Getting out of the house already feels expensive, but the reality is we can’t stop buying what we need. Here are some steps you can take to help you and your family manage rising costs.

  • Set up a savings fund for household emergencies, this is the so-called emergency fund. This is the single most important way to protect yourself and your family in times of recession. Start saving as much money as you can, the most important thing is to save consistently. One practice that has always helped me save my emergency capital is to allocate the money to a specific bank account, preferably a high-yield savings account, and schedule automatic transfers from my checking account to my savings account. The rule of thumb is to save at least 3 to 6 months of our monthly expenses.
  • Pay off credit card debt or your highest-interest debt as quickly as possible. According to reports from the Federal Reserve, credit card debt rose to about $840 billion — up $71 billion from the end of the first quarter of 2021. As inflation rises, credit card interest rates could also rise, making borrowing now much more expensive than before . Also, credit card companies may increase your minimum credit card payment and it may take longer to clear your total debt.
  • Start a side job or side business. Now it’s time to create at least one additional source of income alongside our full-time job. Taking on a part-time job will bring you more income, but it also serves as a safeguard should your full-time job be impacted by the upcoming recession. Focus on your current expertise, passion or skills and find something you enjoy that could generate additional income.
  • Negotiate your current salary at your place of work as prices are increasing everywhere should your job be too. Start researching the current salary range for your position on sites like Payscale or Glassdoor. Then make a list of all your highlights or accomplishments over the past 3 or 6 months in that position. Plan ahead and meet with your boss and ask about your worth. Also remember that this is also the time to network as much as possible. Network with people in your industry and, if possible, apply for higher-paying positions. After all, job hopping is one of the most effective ways to increase our income. If you’ve been at your current job for a year, it’s time for a raise, so come prepared with everything you’ve brought to the table.
  • Keep investing or invest passively for the long term. The reality is that the stock market is much more volatile than usual during high inflation, but there are ways to diversify your investments and lower your risk, including investing in index funds or ETFs (baskets of different stocks, bonds), TIPS ( treasury inflation-protected securities) and I-Bonds (investors can now buy I-Bonds at a rate of 9.62 percent through October 2022). However, if you are investing for the first time or if you feel that you need help, it is better to find a professional like a financial advisor. Before you find a financial advisor, you should ask yourself: Is the advisor on a fiduciary basis? What will your costs be? What services will he/she provide to you? How will he/she distribute your wealth? To name just a few questions. We cannot control how much or when inflation will rise or fall, but what we can do is try to control our household budgets during these pre-recession inflationary times.

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