Managing finances in uncertain times: How to stay ahead amid inflation, market volatility
Rising prices, stock market fluctuations and new tariffs are leaving many Americans struggling to keep up with their finances.
From grocery costs to insurance hikes, the uncertainty of today's economy is forcing people to rethink their budgets and spending habits.
Tracking every dollar
For Walter Raser, a retiree living on a fixed income, financial uncertainty has turned budgeting into a daily task.
"This is my place to go in and find the income that I have to fund," Raser said while reviewing his spreadsheet.
He had hoped to spend his retirement enjoying leisure time, but instead, he closely monitors his expenses, adjusting for price changes on everyday necessities.
"I can tell each how much I'm gonna have. Then I have a formula that figures out each week so I can tell each week how much I'm gonna have," he said.
With inflation still hovering above historical averages, Raser remains on edge.
The cost of inflation
The latest inflation report showed consumer prices rose 2.8% in February compared to the previous year, according to the Bureau of Labor Statistics. Some of the biggest increases include:
• Medical care: Up 3%
• Car insurance: Up 11%
• Eggs: Up 58%
Raser has noticed the jump in prices firsthand, especially when buying groceries.
"At the cheapest prices, they were a little under $4—about $3.78 or $3.98," he said. "Yesterday, $4.78 was the best I've seen in a while."
Expert advice: Focus on what you can control
CBS News Business Analyst Jill Schlesinger advises consumers to take a step back and focus on financial stability rather than reacting to market fluctuations.
"If you have money in investment accounts, checking them every day isn't good for your stress," Schlesinger said. "Check it quarterly, maybe biannually, or at the end of the year."
She also suggests delaying major purchases and prioritizing savings.
"If you look at how you're spending right now and maybe delay any big spending moments, you could probably find a little bit of extra money to squirrel away into that emergency reserve fund," she said.
For Raser, unexpected expenses like replacing a taillight after a minor accident force tough financial choices. Filing an insurance claim could raise his rates, while paying out of pocket strains his budget.
"What is it gonna do to your insurance? Is your insurance gonna go up because you reported an accident?" he wondered.
Schlesinger said that in times of economic uncertainty, financial discipline is key.
"Have you accumulated 6 to 12 months of living expenses?" she asked. "Have you been able to chip away at debt?"
She warns against making impulsive investment decisions based on short-term market movements.
"The lure is to say, 'Oh, I'm going to get out of the market and then I'll get back in at the exact right time,'" Schlesinger said. "That's called market timing. It really doesn't work. It's impossible to pull this off."
For now, Raser continues his careful financial planning, hoping to weather the uncertainty ahead.