Finally some good news for your budget

Meredith Mullins | E+ | Getty Images

Meredith Mullins | E+ | Getty Images

Of all the things we have to worry about financially right now, inflation is happily not one of them.

The government said today that consumer prices rose just one percent in October from a year ago. That was the smallest 12-month gain since October 2009. And prices actually fell by a tenth of a percent last month from September.

The so-called core inflation rate, which excludes volatile food and energy costs, was up 1.7 percent last month compared with a year ago. That’s below the Federal Reserve’s two percent target.

So the good news is, your purchasing power is hanging in there. Gasoline prices were down last month. So were prices paid for apparel, new cars and medical care services. Food and shelter costs were basically flat.

In theory, these numbers should make it easier to save, since you don’t have to spend more just to maintain current consumption.

But the flip side is that rates on all sorts of savings vehicles – from CDs to money funds to bonds – are very low. So you have to shop smart for the best yields, and don’t let super high rates sucker you into taking on more risk than you can stand.

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