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Blog Archive January 2021


What is Inflation?

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Almost everyone had heard their parents or grandparents refer back to the "good old days" when gas and milk prices were significantly lower, and ice cream could be purchased for a single coin. Inflation is the reason those same products cost substantially more in today's economy. The technical definition of inflation explains it as the overall general increase in the price of goods and services in an economy. It represents the purchasing power of a country's currency.

Therefore, as inflation increases, the value of money decreases. The United States Federal Reserve central bank does its best to maintain the inflation rate around 2 to 3 percent. That signifies that the same product purchased this year will cost approximately 2 to 3 percent more next year. Different industries and goods are affected differently throughout the same period of time. Various economic and global situations can result in severe cases of inflation that cannot be easily regulated by the central bank.

One instance of this is hyperinflation, an extremely rapid increase of 50 percent or more in 30 days. This occurrence has happened only a few times in history and resulted in the currency in question becoming completely worthless. As a result, the currency must be reformed, considered without value or replaced.
Another instance of severe inflation is called Stagflation. A period of economic inactivity, combined with low economic growth and high unemployment, results in very high inflation. This economic incidence occurred in the United States between 1965 and 1982 due to recessions, energy shortages and wage controls.

The United States' current economic climate due to the Coronavirus Pandemic is significantly affecting the inflation rate. The Federal Reserve is carefully adjusting the federal funds rate to support the economy, those unemployed, and the health crisis's effects. As of now, the federal funds rate is targeted lower than usual at 0 to 0.25 percent, and several programs have been implemented to assist those in need.

In general, inflation is caused by the overall increase in the cost of goods and services. It is imperative to accurately measure inflation. Doing so allows the government to evaluate ways to support the economy, determine wages and welfare benefits and set interest rates.

Understanding inflation can help one to make the most of their wealth. Those with assets can determine the best time to sell because they realize when their assets' value increases. Moderate inflation can lead to economic growth and the adjustment of wages while adjusting the value of goods to their real value. Investments increase during average inflation because there is a better chance of gaining a return.
A financial advisor is a great resource to explain further inflation and how it can be used to your personal benefit for your specific financial situation.


New Year Organization Hacks to De-Clutter and Save Money

A mature woman smiles as she carries boxes of belongings to sort through whilst in lockdown at home.

While some organization projects may be simple, others require more effort and emotional involvement. Clearing out clothes from a closet can be completed in a few hours, but sorting through old pictures, birthday cards, or other items that hold sentimental value can be a time-consuming task. These sorts of items have meaningful memories associated with them and therefore tug at your heartstrings. Regardless, the objects themselves typically do not hold value, and if you have many of them, they are burdening your home and finances.

Most will agree that a disorganized home causes anxiety. The process of clearing the clutter may seem overwhelming and therefore is often avoided, leading to larger accumulations of clutter and stress. The key to reducing the build-up of disorganization and tackling an already amassed clutter issue is to break down the process of elimination into small steps. Following are some easy guidelines of how this process can be accomplished.

Set a Time Range: Plan a realistic timeline and goal of completion. Consider the project's size to be completed and the amount of time that will be dedicated per day. Plan to use the time effectively and purposefully. Choose a free reward for yourself upon finishing for motivation.

Ask for Help: If there is a family member or friend who would be productive and keep you on track, ask for reinforcement. A second opinion on what can be saved or removed from your home can help to speed things up by avoiding deliberation on your part. Use the help to divide and conquer the various smaller tasks you have planned out. Enlisting someone you know saves money rather than paying a professional organizer.

Start Easy: Begin with the easiest room or project and work your way up to the most difficult. As you progress to harder tasks, you will have discovered new ways of handling challenges.

Try to be Objective: When trying to eliminate items with sentimental value, consider the amount of time you use or view them. If it serves a purpose and is priceless to you, then perhaps it is a keeper. If you have more than one of the same item, you can easily recall a memory or person without the item, or you forgot you even had the item, then you probably do not need to hold onto it.

Hidden Value: Consider the benefit your items may bring to others. Furniture, clothing, etc., is much needed by shelters or can be sold. Perhaps the collectible set that has been gathering dust for years may be worth something extra to put in your savings account.  Do your research to see which items that are not worth anything to you could be worth to others. Social media offers many platforms to sell almost anything in your home for cash.

Need or Want?: The general rule of thumb is that if something hasn't been used in a year, it probably won't be ever used again. Take this into account when going through your home and evaluating what can be eliminated.

De-Clutter Often: Once you've completed the various organization projects throughout your home, you will love the feeling of accomplishment and the clean look of your home. Make it a point to repeat the process every season so that no project will ever become too large.

Viewpoint: As you consider eliminating each item from your home, also think ahead to others that may appreciate the items as gifts, saving you money for future purchases. Many of the items, such as electronics and metal, may even be recycled for profit.

Perspective: Clearing through your home's accumulated clutter will undoubtedly lead to the realization that several things do not need to be on future shopping lists. It should be easy to determine which items have been purchased but not used or bought in excess. This will undoubtedly lead to money saved at the register on future shopping trips.

Future Intake: Carefully evaluate everything brought into your home. Is it essential, will it be utilized? Will it need to be stored? If so, do I need it? Consider paper and online subscriptions that clutter your countertops and inbox, costing you fees. Avoid purchasing items simply because they are on sale, especially if you need to find somewhere to store them. Use a budget to avoid overspending. Cutting out unnecessary items will reduce costs significantly.

Ultimately, choosing to own less and spend less on unnecessary items will result in more savings in your pocket.

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