Western Slope consumers have experienced a surge in prices of 4.2% over the last year! This is the highest increase since 2008! When the prices of goods increase, the purchasing value of your money decreases. A dollar that you had last year, is only worth $0.96 this year. Over time this can erode the value of your cash.
Some examples of notable price increase this year are:
- New or used cars increased 7-10 %, because dealerships couldn’t keep enough inventory due to chip shortages.
- The cost of lumber has increased 400% even at local hardware stores.
- Renting a vehicle or purchasing airfare is up about 10% now that restrictions are lifting.
- Many other goods that we use day-to-day have hit record high prices and most companies are raising prices on their products.
As the economy gets back into gear, Montrose residents will continue to see costs rise, even if the rate of inflation slows.
Inflation can be dangerous to those who are unaware of it. That’s why I call it the silent killer. Ronald Regan once said, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” If you have too much cash sitting in a bank with no plan, you are at risk of losing money. Note, having some cash in the bank as an emergency fund is a wise decision. It gets dangerous when you have too much of your assets sitting in cash. While you won’t see your account value decrease on a bank statement, the amount that you can buy with these funds decreases every year. This year it decreased about 4.2%.
If you are mindful of inflation, you can take steps to protect yourself against it. Creating a game plan to protect against inflation is something that we do every day as a financial advisor. Our goal is to help you protect your assets from hidden risks and achieve your financial goals. “Inflation takes from the ignorant and gives to the well informed.” -Venita VanCaspel
Jaimee Carnes is a Certified Financial Planner ® at ElderAdo Financial.