How Georgia Residents Should Adjust Budgets Amid Record Inflation

GEORGIA — A recent study by QuoteWizard reports that 36 percent of Georgians are struggling to pay household bills due to spiking inflation.

Gov. Brian Kemp has acknowledged the rising costs and on Tuesday blamed President Joe Biden on Twitter following a new Labor Department report released the same day.

"As Biden's policies bring new record inflation, we're working to ease the burden on taxpayers, reducing the cost of gas and providing a tax refund and tax rate decrease," Kempt tweeted.

In a statement from the White House last month, Biden attributed rising prices due to the war in Ukraine.

"As I have said from the start, there will be costs at home as we impose crippling sanctions in response to Putin’s unprovoked war, but Americans can know this: the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing," a portion of the statement reads.

New Labor Department Report

Inflation hit a new, 40-year high in March, jumping 8.5 percent over the previous 12 months, according to the newly released Labor Department report. The news spells out more uncertainty for Georgia households already feeling the pinch of rising costs for necessities.

Inflation has been steadily rising for months for a variety of reasons, ranging from a bottlenecked supply chain and increased consumer demand to volatility in global food and energy markets worsened by Russia’s war in Ukraine, The Associated Press reported.

Ryan Sweet, a senior economist with Moody Analytics, told CNBC in March that inflation costing Americans $296 more a month was “going to get worse before it gets better.”

In fact, Americans haven’t managed such high inflation since 1981, and the 1.2 percent increase in the consumer price index from February to March was the biggest month-to-month jump since 2005.

And with gas prices that have increased 48 percent over the past year and food costs up 10 percent, budgeting for inflation becomes evermore important.

Inflation in Georgia

Estimates vary on how much extra money Georgia residents should build into their household budgets through the end of the year. Bloomberg News did the math, saying households should plan to spend $5,200 more this year, or $433 a month, for the same “consumption basket.”

According to the Bureau of Labor Statistics, prices in Georgia are up across the board.

For the Atlanta metro area, area prices are up 10.6 percent over the past 12 months. From December to February, food prices rose 2.6 percent, energy costs increased by 2.8 percent, and gasoline was up 4.9 percent for the same time frame. Recreation (5 percent) and apparel (6.7 percent) were also among the indexes to increase over the bi-monthly period.

Low, Middle-Income Households Hurt Most By Inflation: Experts

Not all populations feel the same pain at the checkout counter and gas pump, or when they’re making out their rent checks.

Analyses by the Penn Wharton Budget Model and Wells Fargo showed low- and middle-income U.S. households are hurt the most by inflation. The Wells Fargo study, cited by CNBC, showed the middle class is being hit the most; and within that group, Hispanics and Latinos have the steepest jump in living costs.

There’s no way to know exactly how much prices will rise, though the Labor Department’s past consumer price index reports portend continued inflation.

One way to keep track of how much more you’re paying is through a Bureau of Labor Statistics inflation calculator. Say your monthly household budget was $4,982 in March 2021; a year later, you’d need $8,129.09 to pay the same bills.

“This is really harmful for people on fixed incomes,” Carol Ehlers, a human sciences specialist with the Iowa State University Extension and Outreach, said in a news release recommending the inflation calculator as an effective budget-building tool.

“Higher prices mean families need to be more strategic about their spending and find ways to stretch their income. Budgeting for periods of higher inflation challenges families to rethink the way they spend and determine which expenses they potentially can reduce or eliminate,” Ehlers said.

How To Keep Budgets On Track

Analysts and others who spoke to CNBC offered some tips on keeping household budgets on track, including combining errands in one trip to save on gas, searching for apps and digital coupon sites, and canceling or renegotiating subscription services.

Also, experts said, it’s important to check the household budget weekly to see what costs are increasing the most and where budgets can be trimmed.