Rising Prices are a Crisis on a Scale with the Pandemic

How do we navigate the inflation picture?

“This is a national crisis on the scale we saw in the pandemic”

This isn’t me using hyperbole. This is Martin Lewis, a highly regarded consumer finance expert in the UK, discussing what he sees as the impact of sky-rocketing energy bills in the country.

The average household is forecast to spend the equivalent of £4,266 ($5,088) on energy each year from January. That compares with around d £1,400 ($1,670) per year in October 2021.

He also said that without more government support:

“…we are going to leave millions destitute and in danger this winter.”

I’ve talked in previous articles about the need to get to grip on your personal finances (Recession-Proofing Your Life — Part 2) — wherever you are in the world. The daily drip, drip feed of fire, and brimstone economic data reinforce that.

Inflation in the UK is running at a 40-year high of 9.4% right now. The Bank of England expects it to peak in October…at a staggering 13%. This would tie into an energy price rise already guaranteed for that month.

Under that scenario, it’s no surprise that Lewis also talks about the possibility of civil unrest.

And it’s not only Lewis talking about the challenges ahead. A recent survey by comparison site Uswitch indicated many UK consumers are behind on energy payments. The amount they owe is three times higher than in September last year. About a quarter of households in the survey owe £206 ($245) on average.

Now, you may be saying, “That’s all very sad, but I don’t live in the UK.” Or, maybe, “I’m not really concerned by energy bills. I’ve got a good job and I can pay them easily.”

Not so fast.

According to research from the 2022 Global Benefits Attitudes Survey, 30% of US workers are struggling financially, and 43% are having difficulty meeting basic needs. According to the survey, 41% are living paycheck to paycheck this year versus 38% in 2019. Among those earning $100,000 or more, the number living paycheck to paycheck doubled from 18% in 2019 to 36% this year.

Very sobering.

The reality is, it doesn’t matter where you are in the world. Prices are rising rapidly, economic growth is slowing dramatically.

That’s a terrible combination.

That’s why we all need to look at our situations.

There’s a lot of scary crap out there which is dragging down the mood. At best it can paralyze when you should be taking action; at worst it can completely demotivate you.

Don’t get overwhelmed by the noise. It’s tough, I know. But all you need to do is to start small.

For me, that has meant looking at how much I spend on lunch. Sandwiches, bento boxes, rice bowls.

That may sound silly or trivial. And I’m meant to know better. But it all adds up. Often without me even realizing it.

And I turn off the lights when I leave the room. I check my receipts. I look around for coupons. I look at different ways to improve things.

This is about being more intentional with my spending. Yes, I try to see where I can cut back on a grander scale. But it’s about having fewer money leakages. Money that falls through the hole in your pocket because of laziness/boredom/routine/blinkered behavior.

So, tell me, what small efforts are you trying in this crazy price inflation world? How are you trying to save money?

Leave a comment below.

The more ideas we share, the more we can navigate this challenging time together.

I’m a finance guy by trade with an additional background in career and life coaching.

Essentially, I created Spiritworth with the ambitious goal to help others “raise their spirit and raise their (net and self) worth.” A bit grandiose, perhaps, but you’ve got to shoot for something.

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