Gas Prices Hit Record High!

Russian tension continues to grow. MSN reported that President Biden, \”sketched out a broad range of sanctions and other penalties targeting vast swaths of the Russian economy — including frozen assets at top banks, sanctions on Kremlin-aligned oligarchs, and limits on exports that might benefit the country\’s technology sector.\” 

To add to these initial sanctions, new sanctions on crude oil, which equates to between 7-8% of the U.S. demand, and natural gas occurred earlier this week. We are seeing the impact of the invasion continue to ripple through the global economy as uncertainty continues to abound.

If you look closely, crude oil prices had their peak closing price on March 8th at $123.70 per barrel and are currently trading at around $108.00. According to AAA, we hit the highest recorded average price per gallon of gas for regular unleaded at $4.33 and diesel at $5.13 today.

Source: AAA

Factored into the overall CPI index, February raised again from the former peak in January of 7.5% to 7.8% inflation year-over-year.

In addition to the higher prices seen through inflation and ongoing supply-chain issues, we now have added sanctions to the list. But this has not come without significant impacts to Russia.

Russia is first-hand feeling the pressure of not only several fumbles from its hand-to-hand combat, but it\’s also seeing the impact of these sanctions, threats of cyberattacks, and banking activity restrictions out of Russia. They also are feeling the weight of a massive sell-off erasing almost 58% of the MOEX stock market index from its 52-week high, which led to the market shut down on February 25th.

If these things weren\’t bad enough, the Russian Ruble lost almost half its average value to the USD, which is now worth just ¾ of 1 U.S. penny.

Source: Google.com

Let\’s go back to looking at the homefront.

Beyond the inflation and supply-chain issues, cyberattacks are a growing concern, not only in the U.S. but also globally. Wars are no longer only fought in bloodshed but also through cyberwarfare, which might be used as an ongoing basis of attack globally.

According to an MSN article,\”In 2017, an infamous malware known as \”NotPetya\” infected computers across the world. It initially targeted Ukrainian organizations but soon spread globally, affecting major corporations such as Maersk, WPP, and Merck. The attacks were blamed on Sandworm, the hacking unit of GRU, and caused upward of $10 billion in total damage.\”

The article also mentions, \”Last year, Colonial Pipeline, a U.S. oil pipeline system, was hit by a ransomware attack that took critical energy infrastructure offline. The Biden administration says it doesn\’t believe Moscow was behind the attack. DarkSide, the hacking group responsible, was believed to have been based in Russia.\”

These are just a couple of more significant examples of the effects of cyberattacks. As a country, we have become used to an environment where identity theft, credit card fraud, and other cyber threats are the norm.

Many of us may feel a bit ill-equipped when navigating aspects like inflation that represent increases experienced by a cost of living that continues to climb. If it were just gas prices, just interest rates, housing prices, new and used vehicle prices, food, or energy, it would be one thing. But now we are facing more significant cybersecurity issues and fears of ongoing viruses and even threats of chemical or biological weapons. Well, how do we even plan for that? Where do you even start?

Planning for the Unprecedented

In a time like this, where much of this is unprecedented, I would encourage you to control the controllable. Since many of these areas directly affect personal finance, start by reviewing these three key aspects of your personal finances.

1. Plan: Have a plan for your money with a contingency for these price increases. If you usually spend $350.00 per month on groceries, add 10% or $35.00 to that. Look at how you may be able to combine trips, negotiate a 4-day work week, or work remotely to save on fuel expenses. Take a look at non-fixed expenses like subscriptions to see what you can cut down on in order to redirect spending to areas where costs are increasing. 
2. Reserves: Next, take a look at what you have in reserves and where they are sitting. Remember, a credit card, line of credit, or another form of credit is not an emergency fund. Take a look at your situation to see if you have $250, $500, $1,000, or even 3-6 months of living expenses saved. Having proper reserves is critical to weathering storms. Do you have a certain amount of your emergency fund in cash on hand?
3. Debt: Finally, when streamlining your expenses, look closely at your high-interest debt and work to pay it off by looking at your highest interest-bearing account or lowest balance and ordering the debt to help you focus on paying it off.

There is a lot that is out of our control, but you can control what you have the ability to by taking a look at these three areas of your personal finances. Once you have a proper bearing on how you\’re doing financially, you will have a greater level of peace in navigating the other unexpected elements that may arise.

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