Inflation is cooling. Here’s what a Temple professor says you should do now.

Inflation is under 3% for the first time in three years, according to the much-anticipated Consumer Price Index Report released Wednesday, with the Federal Reserve poised to begin interest-rate cuts starting next month.

In July, inflation dropped to 2.9% year-over-year, the Bureau of Labor Statistics reported. That was a slight decrease from June, when the annual number was 3%.

Overall, prices on everything from groceries to rent and utilities remain higher than they were pre-pandemic. And the rate at which costs are increasing is still up compared to 2019 levels. But Wednesday’s report provided promising signs that inflation is cooling.

What does all this mean for Philadelphia-area consumers?

“It doesn’t mean spend more,” said Wayne W. Williams, associate professor of accounting at Temple University’s Fox School of Business, noting that Philadelphia-area inflation is higher than the national average. “Don’t spend more. Spend wisely.”

“There is less pain at the pump, but if you are running the air-conditioning, prices are going to be high. There’s good and bad,” he added. “If you own a home, you can refinance to a lower interest rate because the Fed dropped mortgage rates. But if you own a credit card, you want to pay that sucker down because rates are still high.”

Williams, who is also a certified financial planner, broke down the report.

The following interview has been edited and condensed for clarity.

Inflation softened. What it means is at the cash register you may encounter some lower prices. For those who are borrowers, you are going to encounter lower interest rates. Food and energy prices are down.

For homeowners, they are now refinancing their mortgages with a lower rate than if they purchased in the last few years. So we’re seeing a significant amount of people who are refinancing, home equity loans and home equity lines of credits, borrowers aren’t increasing the borrowing there. So they’re refinancing, which gives them an opportunity to pull money out of the equity, because home prices have stayed up. So for borrowers, that’s good. Now they can do home improvements.

For credit card borrowers, this is a good opportunity to look at balance transfer programs so you can take advantage of any offers. But credit card interest rates have not dropped like mortgage rates. The annual percentage rate is what all credit card users need to check. The annual percentage rate shows how any balances will compound over the course of the year. And those rates are in the 20s and 30s. So not a good time to use credit cards.

Because prices for consumers have dropped, there are some advantages. Diet choices actually make a difference. Fresh vegetables and fruits, those are low. Chicken, bread, those are low. What’s high is bacon and eggs and juices. Consumers need to look for substitutes while they’re doing their shopping.

Another thing that would be good would be more planned purchases. It’s back to school time. The School District of Philadelphia has lots of programs to help Philadelphia consumers who have to purchase school supplies.

» READ MORE: Back to school: Free supplies, drives, and backpack giveaways in Philly

You’re going to have to spend some money this month, so if you’re doing a planned purchasing strategy, you can save.

If you can plan your purchases and use coupons, you’re going to accelerate discounts that you see at the cash register.