You might have heard a lot about inflation in the news these past couple of weeks. Generally speaking, inflation is the increase in the prices of goods and services … which means your $1 doesn’t go as far.

Recently, prices on everyday items — from toothpaste to toilet paper to your favorite citrus fruits — in the US have spiked as the economy regains its footing and pandemic restrictions begin to loosen up.

As Ellevest Chief Investment Officer Dr. Sylvia Kwan explains, this means the economy is recovering quickly, at least for now. Which is great for the economy … but what about your wallet?

What does inflation mean for you … and what should you be thinking about?

The bottom line for investors: We don't know if higher inflation is temporary or long-lasting, so having a diversified portfolio, which can hold up under different market environments, is key.

Any time your fixed costs go up, you should look to see if your spending plan needs an adjustment — especially if your income stays the same. I recommend checking in on your budget at least three or four times a year anyway, and even more frequently if your life or expenses are changing in a noticeable way.

So yes, right now could be a great time to have one of those money check-ins. (And if you’re not sure where to start, we’ve got a 45-minute online budgeting workshop and a 4-week email course that can help you do just that.)

Rooting for you,

Rachel Sanborn Lawrence, she/her
Ellevest Lead Financial Planner