Even if you have a good job, you may find living expenses are becoming unbearably high. While many economists believe inflation may be a temporary phenomenon, you may have to reach for your credit cards to purchase the items you need.
According to reporting from NBC News, virtually everything is more expensive now than just a couple of years ago. While the rent the average American has paid has only gone up by about 3%, a used car is likely to cost nearly 25% more.
Wages are keeping pace
Even though inflation and supply shortages have caused prices to skyrocket, wages have mostly kept pace. In fact, the Associated Press notes earnings have jumped more during the previous year than in any of the prior 20 years.
Still, not all industries are seeing wage increases. If your salary has only marginally increased or stayed the same, you effectively may be earning less due to higher prices.
Keep an eye on your credit utilization ratio
Accumulating too much debt when prices are high may cause your credit score to tank. Even worse, you may not have the financial resources to make even monthly minimum payments. Until prices return to normal, it is advisable to monitor your credit utilization ratio carefully.
Your credit utilization ratio is simply the amount of credit you are currently using compared to the amount you have available. If your credit utilization ratio is more than 30%, you may want to explore debt-relief options.
Ultimately, because bankruptcy may allow you to discharge many of your outstanding debts, seeking bankruptcy protection may help you combat rising prices.