Here’s how to spend smarter as consumer prices rise

After a year of lockdown, you may be ready to make up for lost time and start going out — and spending more.

At the same time, prices are rising due to inflation.

Consumer prices in May were up 5% from a year earlier, according to the Labor Department’s Consumer Price Index, which represents energy, groceries, housing costs and other goods. It’s the biggest gain since August 2008.

Therefore, it pays to be smart about how you spend.

Before you open your wallet, look at your total financial picture. That can help you determine which parts need the most attention and where you have some breathing room.

Add up your assets, including the amount you have in checking, savings, investment and retirement accounts, plus the estimated value of your house or any properties you own.

Then, add up the value of your liabilities, such as credit card balances, student loans, mortgage and car loans. Where your finances currently stand lies in the answer to this equation: assets – liabilities = net worth.

Your immediate financial plan and priorities during the pandemic may have been different than what you would like to do with your money now. Think about what you are going to start spending on again, like dining out or travel, and incorporate it into your budget.

“It is really meant to help guide you so that you can have the best of both worlds: You can live your life…