CLEVELAND — Tax filing season is underway which means refunds could start rolling into bank accounts as soon as this week.
Many Americans are feeling the financial squeeze with prices spiking from food to gas and more. Right now, many crucial pandemic relief measures aren’t available to fall back on this year.
The money crunch is already causing financial experts to warn about budgeting for inflation in 2022.
“Inflation is sticking around, and everywhere we go, it seems like we're paying more,” said Benjamin Grosko, of Integrated Wealth Management.
Grosko suggests people consider three things when evaluating their finances this year:
1. Bring debt down: Take note of the interest rates you’re paying and prepare for an increase this year. Consider a balance transfer to a card with a lower APR. Enrolling in auto payments can also help avoid late fees.
2. Create an emergency fund: If you find yourself in a situation where you lose your job, miss a paycheck or face an unexpected medical bill, you should have enough money tucked away to cover 3-6 months of expenses.
3. Revisit your saving goals: Investing or staying invested in stocks is one way to stay on track and beat inflation.
“If you're lucky enough to invest in your 401k or put money to work for you, if you've been saving the last few years, staying in the market will help you combat inflation,” Grosko said.
Also, keep in mind that mortgage rates have gone up during the past three weeks. Many experts predict that will continue in 2022 and that rents are also forecast to move higher.
“Refinance your home if you haven't already, you know, interest rates are still at an all-time low,” Grosko said. “If you're in the 4 or 5% range on your house, you may want to look into refinancing because that may free up some money on a monthly basis.”
P.J. Conway, owner of Mentor Family Food is seeing firsthand how inflation and supply chain issues are impacting families across Northeast Ohio.
“You're seeing customers change - different cuts of meat, different types of produce,” Conway said. “It's becoming more of a need rather than want.”
The historical price hikes are expected to continue through the end of the year, with no relief in sight for shoppers.
“Everybody's tightening their belt again and going from there, they're going back to basics,” Conway said.
If you’re still unsure about your budget for the year, consider talking to a financial professional to get on the right path when it comes to your finances. The deadline for filing your taxes is Monday, April 18.
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