Inflation, Your Money & the Holidays

Through the end of the year, the Board Brief will look at decisions our members face due to the impact of inflation.

For the longest time, Fed interest rates have been very low with only nominal inflation (2% or less).

Since the pandemic, it is running more than 7%; more in certain goods (like homes, gas and the like).

The Federal Government defines inflation as the change in the costs (over time) of a fixed basket of goods (food, rent, transportation, etc.) bought in an urban setting. The timeframe is usually a comparison of one month to the prior year’s month. A positive change is inflation. Economists define inflation slightly differently. To them, inflation is the change in money supply (M2) over the same timeframe (current month vs. previous year’s month). Since 2008, the money supply has grown from $8 trillion to $22 trillion! So how does all this affect YOU? Ultimately, it affects your budget and your purchasing power. Over the next two months, we’ll highlight a few strategies at your disposal and how we, as your Credit Union, can help.

OUR ADVICE
Remember, the difference between wealth and poverty is two cents. The one who makes a dollar and spends 99 cents creates wealth. The one who makes a dollar and spends $1.01 leads to poverty.

We’re here to provide you the tools to help best manage your money. Stay tuned!