Surviving High Inflation
How to Survive Inflation. With inflation at a forty-year high, the rising cost of living is affecting everyone. While you may feel some distress as you watch the steady decline in your purchasing power, you do not have to sit idly by while it happens. Here are some things you can do to survive this time of high inflation, no matter how long it lasts:
- Reevaluate your spending. Most likely, your income is not increasing at the same rate that your expenses are growing, so one way to counteract these rising costs is by lowering your expenses. Start by looking at how much you are spending each month. Then, look at what you are spending your money on.
- Are there unnecessary expenses that you can cut out?
- Are there monthly subscriptions being billed to you that you need to remember about? Are you using that gym membership, or have you subscribed to multiple entertainment services when one or two would suffice?
- Are there ways to reduce the cost of necessary expenses? For example, are there cheaper options for your cell phone service (e.g., a prepaid or a limited data plan) or your auto or home insurance? A simple phone call or internet search can save you hundreds of dollars.
Consider a side hustle.
If you have cut as much from your expenses as possible but still come up short, you may need to look at ways to increase your income. Your imagination and creativity limit the options for a side hustle outside your nine-to-five job. You could offer photography, petsitting, or tutoring on various topics, from gardening to laying tile to writing essays.
You could sell handmade items online on Etsy or things that you no longer want on eBay or Facebook Marketplace, or rental property that you do not use all of the time, such as a recreational vehicle on sites such as Outdoorsy or RVshare, or even your pool on Swimply. The possibilities are endless. (Note: please ensure you are adequately covered through your liability insurance company before you do this!).
Use increasing interest rates to your advantage by investing even small amounts of money.
If you have money in an account that earns interest at a rate below the inflation rate, consider putting that money in an account where it can make a higher interest rate. For long-term savings, consider purchasing Treasury I savings bonds. The interest rate for I-bonds is designed to meet or beat inflation, and the current annual rate is 9.62 percent. For short-term savings that you may need to access, such as an emergency fund, consider using a high-yield savings account.
While watching rising inflation rates eat away at your spending power can be frustrating, you do not have to sit by and watch. Please be proactive, and you can use these tips to fight back.Take stock of your current financial situation and think about what kind of long-term and short-term savings goals you have. Once you have determined what you need to save for and how much, you can start looking for the best returns on your money. Investigate different savings accounts and compare their interest rates to the current inflation rate. If you find an account with an interest rate higher than inflation, then you can make sure that your money is working hard for you. Don’t forget to consider other options like certificates of deposit and money market accounts, as these can also provide you with a good return on your savings.
Francine D. Ward
Attorney-At-Law, Author, Speaker
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