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Fighting inflation: Finance professor says budgeting is key

“Inflation is currently running at a 40-year high so we’re seeing numbers we haven’t seen in a very long time," said Assistant Professor of Finance William Procasky.

CORPUS CHRISTI, Texas — Whether it’s gas or groceries, we are all feeling the impacts of inflation across the board-- and all looking for ways to stretch our dollars.

“We had an era of low inflation with technological advancement and global supply chains reducing costs and we’re coming out of that, the pandemic already started that,” said Assistant Professor of Finance at Texas A&M University Kingsville, William Procasky.

We hear the word inflation just about every day and right now, Procasky says it’s high.

“Inflation is currently running at a 40-year high so we’re seeing numbers we haven’t seen in a very long time, you have to go back to 70s early 80s,” said Procasky.

There’s more than one the cause behind it, starting with the COVID-19 pandemic

“We were having a supply-demand imbalance with some people working remotely or staying out of the work force and a lot of money, a lot of fiscal and monetary stimulus that stimulated demand,” said Procasky.

That’s not all.

“With oil prices- and then we have the situation in Ukraine and affecting energy and food that way and so we’re in a very high inflation environment we haven’t seen in a long time,” said Procasky.

RELATED: US adds 372,000 jobs in June, Fed will likely raise interest rates in response

You may think one solution to fighting inflation is getting another credit card, but Procasky says that’s not the answer.

“We are in a rising interest rate environment. The Central Bank, the fed, is having to raise interest rates to try to dampen the demand to dampen inflation,” said Procasky. “So, you could end up with higher interest rate expenses, especially if you’re not able to pay that off at the end of the month.”

The question we are all asking is when will things get better. Procasky says it’s going to take time.

“It will take a while for inflation to come down. You’ll see a step down in monthly and year over year increases, but it’s gonna take a while,” said Procasky.

RELATED: Yes, some U.S. states are sending out ‘inflation relief’ tax rebate checks

Procasky says the best defense in fighting inflation is to budget.

“We need to look at things and moderate our behaviors where we can and different people will have different flexibility with different things,” said Procasky.

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