Consumer Prices Have Hit a 30-Year High, According to Key Index

Inflation continues to hit consumers' wallets. Here's what you need to know.

It's no secret that many of life's basic expenses have been costing more money for months. But new data confirms just how intense price hikes have gotten.

The PCE price index -- the Federal Reserve's preferred measure of inflation -- rose 4.3% in August compared to the previous year. That represented a faster pace than the 4.2% increase recorded in July. It's also a 30-year high.

Incomes can't keep up

Although U.S. wages increased in August, they only rose 0.2%. Disposable income rose even less -- just 0.1%. What this means is that the typical worker who gets a raise today might still end up losing money by virtue of how intense inflation has gotten.

Combating inflation

Inflation may already be hitting your wallet. If you're paying higher prices at the pump, spending more at the supermarket, and forking over more money than ever to clothe your family, you're in good company. But that doesn't mean you aren't having a tough time. Still, there are steps you can take to fight back against inflation.

Set yourself up with a budget

Budgeting is always a good thing to do, but when inflation runs rampant, it's even more important. If you're spending a little more at the supermarket one week and a little more at the gas station another week, you could wind up in debt, especially if you live paycheck to paycheck and don't have money in savings to fall back on.

Since you'll need to track every last dollar you spend, take the time to map out a budget to follow. That budget should prioritize your essential expenses, like food, housing, and transportation. Once you've accounted for those bills, you can allocate money toward other expenses, like entertainment. You may find that you can't afford to spend as much in certain categories as you used to, and unfortunately, you may need to live with those changes until the cost of common goods and services comes down.

Get a side job

A side hustle could be your ticket to not only fighting inflation, but maintaining the lifestyle you're used to in spite of it. We just talked about having to cut back on expenses to avoid landing in debt due to rising living costs. Well, if you manage to boost your earnings enough, you may not have to cut back much, or even at all.

Say that because groceries, gas, and other essentials now cost you more every month, you've been landing $100 in the hole every month. If you can find a side job that allows you to come away with $100 more a month after taxes, you'll be able to manage those cost increases until circumstances change.

Inflation can be a difficult thing to grapple with, and we may be in for many more months of it. The good news is that you do have the power to battle inflation -- and come out financially unharmed.