What does current inflation mean for your wallet?
Inflation has cooled to its slowest pace in more than two years. But it's still hitting wallets hard, impacting prices of everything from groceries to housing, as Coloradans work to make ends meet.
"Inflation, let's face it, it's an issue," said Roger Reynolds, president and founder of Reynolds Financial Group. And it's an issue he works to tackle with his clients daily.
"The question some of our clients ask is, 'What do we do? Inflation is really high.' For many years, inflation was fairly consistent, but with the pandemic we've seen interest rates go very low, and then they rebounded and spiked," said Reynolds.
CBS News Colorado's Mekialaya White sat down with Reynolds for a breakdown of what that means in everyday life.
"So, if inflation has gone up by 8%, that means we have to spend 8% more to get the exact same purchase. Let's say you had $100 in the year 2000. Today, in 2023, you need $174 to buy the exact same thing. Another way to look at it... if you bought a hamburger in the year 2000, and you buy it in 2023, you'd only get about 58% of that hamburger for the same money."
He continued, "It can have some good impacts. Like, if we're getting higher interest rates on our investments or savings. But inflation can cause other issues: a potential recession, higher home prices, higher mortgage rates."
Right now, certain populations are more vulnerable to those increases. "Inflation especially impacts those on a fixed income. With prices going up 6, 7, 8%, that can be very painful."
But there are practical ways to still manage your money.
"There are ways. There are solutions. We need to make sure we're smart about our money, whether it's in a savings account or checking, make sure we give the best interest rate we can on our accounts. Make sure we get a rate of return that's at least as high as inflation if not better. If not, we're losing purchasing power," said Reynolds. "Hopefully, we'll get to normal inflation rates soon and things will level out. How long will it take? It might take a year. It might take two. It might be quicker."
If you have questions and want to ask a professional at Reynolds Financial Group you van visit reynoldsfg.com.