By Benjamin Din + Meghan Coyle + Rosalie Murphy
Amid stagnating wages and rising prices, the financial pros will tell you the same thing: You can’t keep saving and spending the same way you always have if you want to keep up. There are plenty of things you can do to combat some of the biggest issues facing consumers today.
Here’s what some Asian and Pacific Islander financial pros suggest for how to beat inflation, save at the pump and maybe even take the plunge if you’re considering starting your own business.
Responses have been edited for length and clarity.
1. Hui-chin Chen
Inflation has risen 8.5% over the last 12 months, according to the U.S. Department of Labor and Statistics. To combat inflation , Hui-chin Chen, a certified financial planner who runs the Money Matters for Globetrotters blog, recommends focusing on the income and expenses you can control.
“Inflation manifests in our lives through having to spend more to maintain the same lifestyle. That means there are only two things anyone can do to cope — make more or change lifestyle.
“During the time of Great Resignation, the workers who have the drive and ability to earn that higher return of capital will be better poised to face longer-term inflation.
“Changing lifestyle doesn’t mean we need to give up what is important to us or even live a lower quality of life. It requires first taking stock on what part of your spending is inflated outside of your control, and taking control on the part you can.
“For example, those with fixed-rate mortgages will not see a huge jump on housing cost, but those renting might. On the other hand, those who are location independent can seek greener pastures more easily for lower cost of living than those tied down by a job or house.”
More about Hui-chin Chen: Chen is a CFP and the principal of Pavlov Financial Planning. She is an immigrant and expat, and is passionate about making cross-border financial planning accessible and does so through her founding of the CIGA Network and her blog, Money Matters for Globetrotters. Twitter: @huichinfp
2. Vivian Tu
Vivian Tu, better known as “Your Rich BFF” on TikTok, said everything we’re used to buying is going up — milk, cars, travel. Think about that when annual raises come up at work.
“Readers can work to combat inflation by asking for meaningful raises of 10-15% annually and investing their money . By stowing money away in a savings account, their dollars will lose value over time, but investing in a healthy, diversified portfolio over the long term has historically shown to help folks keep pace, and often see gains above inflation.”
More about Vivian Tu: Tu is a Wall Street veteran turned finance creator. Blending topics such as student debt and homebuying, with anecdotes about celebs and funny stories, Vivian aims to make talking about money less taboo for the next generation of Rich BFFs. TikTok: @yourrichbff
3. Winnie Sun
Now is a good time for consumers to take a hard look at their spending, said Winnie Sun, a financial advisor with Sun Group Wealth Partners.
“With inflation continuing to rise, one of the best steps individuals and families can do is to deep dive into their household expenses. Pull out your monthly statements — be that credit card or bank statements — to see where all your money is going.
“Then, ask yourself if there are areas you can decrease spending , even if it’s temporary? For example, if you subscribe to both Netflix and Hulu, can you commit to just one for six months and then use the next one for the next six months? This could potentially downsize your streaming budget by 50%, which is great for your budget.
“Try to focus not only on the smaller expenses, but also on the bigger ones. If you have two cars in your household, can you use just one for a few months? That could help you reduce your auto insurance and license fees on the other one.”
More about Winnie Sun: Sun is managing director of Sun Group Wealth Partners, a member of the CNBC Financial Advisor Council, Forbes contributor, and TV host of “Level Up With Winnie Sun” on Nasdaq. Twitter: @winniesun
4. Phuong Luong
In addition to rising inflation, average U.S. gas prices have risen to $4.12, according to AAA; that’s up more than $1 from a year ago. To save money, you could move closer to work, request to work from home, switch jobs or take public transit, said certified financial planner Phuong Luong. But not all of these options are available or realistic for everyone, she said.
“Inflation does not impact everyone in the same ways. Budgeting tips work for people who are in a position to cut spending or increase income — the problem is that many Americans are not.
“In reality, millions of Americans have been impacted by rising costs in food, housing, transportation, and health care, and decades of wage stagnation, long before the pandemic and recent mainstream media focus on inflation. You can’t budget your way out of not being able to afford basic necessities, and more individuals and families are experiencing this as costs continue to grow and impact those who previously had more slack in their household budgets.
“Mainstream financial advice perpetuates the idea that individuals should solely be responsible for their financial security.
“There are bigger structural factors here that require public policy solutions, such as removing barriers to affordable housing, jobs that pay living wages, and health care for everyone. What this current national focus on inflation should make clear is that the actions we need are collective ones.”
More about Phuong Luong: Luong is the founder of Just Wealth, where she teaches and writes on racial and gender wealth divides, financial history and sustainable investing. She is also a principal financial planner at Saltbox Financial, where she helps individuals and families invest and give in ways aligned with their values. Twitter: @pt_luong.
5. Paula Pant
Paula Pant is founder of Afford Anything, a website and podcast about building financial independence. Here’s her take on feeling pain at the pump:
“The thing about gas prices is when we are standing at the pump, right, we have nothing to do other than watch the freaking ticker just go up. You’re standing at the pump, and you’re just watching the price go up and up and up. And so we feel the emotional pain of rising gas prices because it’s so visceral, so salient. There’s nothing occupying our attention other than watching that price climb for the entire duration that we’re filling our tank.
“Now, compare that to something like your insurance premium. Your insurance premiums might have gone up substantially. And the total effect that that has on your budget, depending on how much you drive, might be the same. But we don’t feel the pain of an insurance premium hike in the way that we feel the pain of higher gas prices at the pump. It’s the emotional pain of prices that are visible to us, versus the ones that tend to be a little bit more hidden or invisible.
“And so the tip that I would have is look for those invisible price hikes, and see how you can address those. Look for the insurance premiums that have gotten jacked up and see if you can shop around . Those present opportunities to claw back different areas of your budget, which then free up more breathing room for, you know, for the things that you have to buy that have risen in price.”
More about Paula Pant: Pant is the host of the award-winning “Afford Anything” podcast. It was named by The New York Times as one of “7 Podcasts Your Wallet Will Love.” She is also the founder of Afford Anything, a personal finance brand with more than 70,000 newsletter subscribers.
6. Berna Anat
Americans filed nearly 10 million applications for new businesses in 2020 and 2021. If you’re thinking of starting your own business, Berna, a self-described “financial hype woman,” has some gems for you.
“My one piece of advice for folks thinking about launching their own business is to not think of it as an all-or-nothing game. The smartest folks let the numbers guide them.
“If you’ve got a 9-5 ‘regular job’ now, take a look at what you earn each week or each month, and aim for your new business to earn just 5% of your regular job income. Start small, and work your way up to 10%, then 20%, then 30%.
“Do not let the internet or other entrepreneurs rush you. I personally would not consider jumping ship from my regular job (or those sweet, sweet benefits!) until I was earning, or have a clear projected path to earn, 75-80% or more of my regular income.”
More about Berna Anat: Anat, also known as @heyberna, is an award-winning producer, author, “rich unmarried auntie” and financial hype woman. After teaching herself to pay off over $50,000 in debt, she’s been traveling the world trying to make money more accessible for young people of color everywhere. Berna just finished her HarperCollins money book for young adults, launching in May 2023. Instagram: @heyberna
7. Chris Chung
Chris Chung of The Everyday Millennial on Instagram encourages aspiring entrepreneurs to focus on progress instead of perfection.
“As you launch your new business, focus on gaining valuable experience in the day-to-day operations and direct feedback from your customers. The earlier you start receiving feedback, the faster you’ll be able to make adjustments and pivot if needed.
“After launching a personal finance course with 150 students in 2021, I was able to release a new upgraded version in 2022 — with feedback directly from my students. If I hadn’t launched in 2021, I wouldn’t have received this valuable feedback to enhance my course and better understand my target audience.
“As a small-business owner, know that it’s perfectly OK to learn as you go. You don’t have to figure everything all at once. Instead, focus on making progress and generating positive momentum in your business. You’ll be glad you did.”
Read next: Welcome to Generation Z’s first bear market
More about Chris Chung: Chung, founder of The Everyday Millennial, is a first-generation immigrant and dad who started taking control of his money at age 26 when he paid off $50,000 worth of student loans in two years. Today, Chris is on track to retire early at age 45 and wants to inspire others to reach financial freedom. Instagram: @the.everyday.millennial
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Benjamin Din writes for NerdWallet. Email: email@example.com.
Meghan Coyle writes for NerdWallet. Email: firstname.lastname@example.org. Twitter: @inkwaves.
Rosalie Murphy writes for NerdWallet. Email: email@example.com.