Every month, inflation is becoming a bigger issue. America isn’t the only country that has been affected by it — Japan’s economy has also been experiencing inflation. And more countries could join as most nations around the world are feeling the effects of the COVID-19 pandemic.
It’s becoming a major pain to the Biden administration, especially when thinking about November’s midterm elections. Inflation has given opponents of the Democrat Party fuel for their campaign rhetoric. The thing about inflation is that everyday Americans are feeling it. It’s not just an idea or a term thrown around the news cycle. It’s something that has been directly affecting the decisions that Americans are making.
If finances weren’t already tight for Americans, inflation has been making American budgets even tighter. President Biden spoke to the public earlier this week and put blame on the COVID-19 pandemic and Russia’s war in Ukraine for growing inflation and rising gas prices. What makes the inflation issue so difficult is that it can be hard for Americans to understand that anything is actually being done to fix this problem. It can be helpful for a president to lay out specific details and steps rather than speaking vaguely. President Biden has been attempting to reassure Americans that the work is being done.
During the President Biden’s speech earlier this week, he said:
Look, the bottom line is this: Americans have a choice right now between two paths, reflecting two different sets of values. My plan attacks inflation and grows the economy by lowering costs for working families, giving workers well-deserved raises, reducing the deficit by historic levels, and making big corporations and the wealthiest Americans pay their fair share.
The other path is the ultra-MAGA plan put forward by congressional Republicans to raise taxes on working families; lower the income of American workers; threaten sacred programs Americans count on like Social Security, Medicare, and Medicaid; and give break after break to big corporations and billionaires.
The president added:
"I want every American to know that I’m taking inflation very seriously and it’s my top priority."
To be candid, most Americans probably don’t know the answers to beating inflation, but they do want to know more specific details on what their government is doing to help them out. They want to be reassured that they won’t be left behind and forgotten. Otherwise they could start panicking and making rash decisions, especially when they can't escape the doom-and-gloom news cycle. It makes things much harder to live through when it appears that there’s no way out or the problem is being ignored.
It also leads people to try to fix the problem themselves or attempt to take control of the situation so that they don’t lose any money or get into a financial struggle. With the stock market selling off and inflation at a four-decade high, it’s hard not to take some type of action to prevent losses. It's human nature to get a little emotional. However, acting on emotion and making quick decisions could cause you more problems in the long run. That’s why some advisers are suggesting that people turn to automation to help take their emotions out of the situation. Having help from artificial intelligence and robot advisers could be the answer you need to weather the storm.
A recent survey by Bankrate.com noted that around 75% of adults say rising prices are adversely affecting their finances. Automation can step in to help make sense of your day-to-day spending and assist with saving money in a way that fits into your budget. These types of decisions can often become overwhelming for individuals. It can be hard to decide where to make cuts and create a plan that you stick to. Heidi Johnson, director of behavioral economics at the Financial Health Network, said:
You don’t even have to worry about making those decisions, which I think can feel really challenging when the environment around you is changing.
Using automation to help you with your financial planning and finances doesn’t mean you can't stay active in your finances. You shouldn’t let algorithms dictate every financial decision, but they can help you out. You should still play an active role in your finances. During economic turmoil, it can be difficult for a person to know how much to save. Automation apps can help you understand and analyze your spending habits and help you stash money away so you can create savings for yourself and your family.
Apps like Digit and Albert have helped people save their money more strategically without significantly adjusting their lives so that they can’t enjoy the things they’re used to enjoying. Digit says that its average user saves $2,200 a year. Another tool that could prove to be useful for Americans is Intuit’s (NASDAQ: INTU) budgeting app, Mint. Mint has helped users track every penny that comes in and out of their accounts. Since Mint teamed up with Intuit, the app has added various algorithm-based features that help identify ways to free up cash for emergencies or help you avoid unnecessary fees.
These types of apps could help reduce the stress that you may be feeling right now as you try to navigate market turmoil and high inflation. Before you stress and make rash decisions regarding your finances, take a deep breath and consider testing out some of these algorithm-based apps to assist you. Market volatility and inflation have happened before, and it’s best to keep calm because we’ll make it out on the other side just as we have in the past.
Until next time,