MONEY MATTERS

How to secure your finances for inflation

One of the most talked about topics of the year has been inflation. Inflation can be a sneaky, invisible cost that you might not notice in your small daily purchases, but it can add up quickly at the register on your weekly grocery trip or an outing at the mall. It will impact your finances, from routine household expenses to major purchases like a new home.

The best way to prepare for inflation is to be proactive in knowing and assessing your long-term financial plans. I’m a big advocate for people knowing where their money is and how it’s working for or against them. Conducting monthly selfcheckups to evaluate your finances is one of the most important financial habits you can put in place. This simple task can prepare you for life’s uncertainties while simultaneously allowing you to be able to take advantage of any opportunities that may arise.

Here are some of the key areas to pay attention to when evaluating your finances.

Real estate holdings

If you’re looking to purchase or refinance a real estate asset, it’s important to know that rates are likely going to start increasing, so it might be time to make a move. Be flexible and open to what will serve you and your current situation best – it might make financial sense to liquidate some of your real estate holdings now to take advantage of today’s real estate asset valuations.

Construction plans

We’ve all seen the headlines and know the cost of construction has significantly increased over the last 18 months. As you plan, consider whether your current and future income is enough to justify today’s increased costs. If not, talk with your lender to understand what available financing options you may be able to afford and utilize and work with your contractor to value engineer your project accordingly.

Household budgets

With the costs of everything going up, it’s a good time to re-evaluate your household expenditures. If you’re paying more for groceries and utilities, are there places you can cut back on spending to offset the change? If your income is flat relative to your necessary expenditures, you may need to delay larger purchases.

Meet with your banker

I can’t emphasize enough how important it is to have honest and open conversations with your banker. If you’re pondering a project or expecting a major life event, it’s an ideal time to discuss these with your banker. Lean on them for their expertise before you decide to make a major purchase or financial decision: This is their job.

Re-examine your retirement plans/investments

Most people meet with their wealth or financial advisors annually to take life events into consideration, but these days it’s important to have more frequent discussions. Speak with a wealth advisor to be sure you have an investment portfolio with the right mix of assets and income that will allow you to meet your goals. Good retirement plans take inflation into consideration and allow you to maintain purchasing power over the longterm.

MONEY MATTERS

Kevin Speaks

~ Kevin Speaks is a Commercial Loan Officer and Vice President for Valley Bank at the Alexander City location on Highway 280 who specializes in commercial and small business lending. He has been in the banking industry for 13 years.