How to Protect Your Money From Inflation
The cost of living has been rising all over the world. From the United States to New Zealand, all countries around the globe are affected. In this article, we’ll show you the ways to tackle and get over this issue.
In January, the Consumer Price Index in the United States climbed 7.5% year-over-year, the highest level since the 1980s. By the year’s conclusion, prices in the United Kingdom had risen by 5.4%. And in the eurozone—the 19 countries using the euro—it recently hit 5.1%.
Beneath the headline rate of inflation – the highest in almost a decade – are some even steeper price rises for many daily essentials, such as energy. This week, officials warned that one in 10 families is facing a financial crisis this month, and for all but the wealthiest households,
there are shocks at the checkout, when bills land in the inbox, or at the doormat.
15 Ways to Protect Your Money From Inflation
1. Less Driving
Jon and Jess don’t use automobiles for work, so they don’t need them daily. But they’re hesitant even to use it for fun. Jess’ vehicle cost over £50 to fill last week, which surprised her. ‘We won’t travel to North Norfolk and burn a quarter of a tank of gas; we’ll do something locally. It influences our weekend plans.’
The energy crisis strains many families’ budgets. The Daly’s are on a fixed-price British Gas tariff, so their unit prices haven’t risen, but their monthly spending has risen since they need more heating with a small infant and work from home. Jess says:
“Before we had a kid, Jon probably thought I was sparing with the heater. Now it needs more.” Their monthly direct debit could jump by £20 to £100 in August, and they may have to pay more this
winter. Their fixed rate expired in April, and costs will likely continue to climb.
Switching to the variable rate tariff today would not have any impact, but switching to a fixed rate tariff with their supplier would mean paying roughly twice as much. They could switch to a variable agreement in April, but a new price ceiling will take effect. Analysts say the threshold may be 30% more than it is presently, boosting average expenses from £1,277 to £1,660 a year.
The Daly’s trimmed their cable TV and broadband costs, which had “crept up” to £70, by canceling channels. They now pay £38 for a basic bundle. Before becoming parents, they went to the movies twice a month but lost track of the expense. According to the ONS, cinema, theater, and concert tickets are 9.5% more costly than a year earlier.
The story of the Daly may be familiar with what other families worldwide are experiencing, even at home. And based on what we’ve learned from this story, there are still more ways to cut the living expenses that we’ll share with you today.
2. Decide on a spending plan
Your cash flow has to be reevaluated before you can combat inflation. If you know how much money you have coming in and going out of your bank account, you can better protect yourself against inflation.
3. Take public Transportation
If possible, take public transportation. Having just come out of a pandemic, you may still be wary of using public transport; bacteria is lurking in the air! But here’s the thing: an hour or two of wearing your mask is less hurtful than the amount you’ll be spending on gas, insurance and maintenance. Use your vehicle only when necessary. If you have more than one, consider selling the other automobile if it isn’t an absolute necessity.
4. Pay off all your credit card debt completely
Debt on a credit card may be quite costly; therefore, it’s better to pay off your credit card debt quickly. According to Forbes, the average interest rate on a non-rewards credit card in the United States is between 16 and 18%. Paying off your credit card debt in full can save you from paying a hefty penalty when interest rates rise further.
5. Refinance your mortgage.
We recently met a well-known advisor who acknowledged that she had employed a broker herself! If your mortgage isn’t competitive, consider refinancing. Refinancing with an alternate lender may entitle you to bonuses and rebates.
6. Change your health insurance provider
Several health plans are planning to raise their premiums in April. If you want to avoid paying more, you can consider joining a health insurance plan that has promised not to raise its prices in the future.
7. Change your cell phone provider
You may save hundreds of dollars a year if you switch to a competitor’s cell service.
8. Solar power is the way to go
Consider installing solar panels if you want to save even more money on your utility costs. Aside from that, government incentives are readily accessible, and many solar firms are now offering flexible payment plans.
9. Obtain membership cards at gas stations
Participate in fuel station rewards programs such as membership cards. You may be eligible for extra benefits and savings.
10. Get some money for your goods by putting them up for sale
Get some money for your goods by putting them up for sale.
Observe what’s going on around you. There’s a good chance that many of the items you own are merely gathering dust. These items may be sold online for extra money.
11. Shop wisely
Coupons might help you save money at the grocery store. Buy at a supermarket or grocery store to get a wider selection and lower prices. Also, shopping while hungry is a bad idea. You may be tempted to buy unnecessary meals since they all appear delicious.
12. Check to see whether you are eligible for government Aid
Pensioners, caregivers, veterans, job seekers, and retirees will soon
be receiving a windfall from the federal government in the form of cash payments. Check your state’s website to see whether you qualify for a state-specific subsidy.
13. Buy and stockpile non-perishable goods
Buy and stockpile non-perishable goods. Start creating a stockpile of every day, non-perishable goods. Concentrate on items your family uses regularly; don’t focus on food just yet. We’ll get to that. Think about hygiene products, for example.
The following are a few suggestions for non-perishables to have on hand
- Disposable towels
- Paper towels
- Bar soap
- Deodorant
- Dishwashing liquid • Toothpaste
- Dish soap • Clorox
- wipes • Diapers
- Wipes for babies
- bath and body products
- Vitamins
- Over-the-counter Drugs
14. Get a stockpile of food reserves for your family’s consumption
The United States Department of Agriculture estimates food prices.
The grocery store will rise 5–6% globally in 2022.The USDA gave the following price increase predictions for 2022:
- 5.5–6.5% for beef, poultry, and fish
- 6-7% eggs
- 6-7% dairy • 8–9% fats and oils
- 6-7% of the fresh fruit
- 4-5.5% fresh vegetables
- 5.5–6.5% for sweets.
- Bakery goods and cereals—6-7%
On that note, you’ll want to stockpile the perishable foods you and your family usually consume. Stock up when you see a good deal on the food you use. If you have the extra freezer space, take advantage of sales on meat in particular. When it comes to canned foods and other packaged goods, buy only what you can use before they expire. If you’re wondering what food to store before inflation rises even further, here are some suggestions:
- Peanut butter (an excellent source of protein)
- Pasta
- Canned tomatoes
- Baking supplies—flour
- sugar, yeast, etc.
- Oils for cooking
- Preserved fruits and veggies
- Applesauce
15. Take Out Term Life Insurance Rather than Permanent Coverage
While I may not be an expert in life insurance, it still baffles me (as an amateur) that so many people pick whole life insurance instead of term life insurance. All one needs to do is compare the costs to see that the latter is far better than the former.
According to Nerd Wallet, for a 30-year term life policy, the average yearly cost is more than 10 times that of a $500,000 whole life policy. In my opinion, I’d rather pay for a term life insurance policy and put the remainder of the money into a Roth IRA, 401K, or even an S&P 500 Index Fund.
16. Understand the Difference Between Wants and Needs
It’s one of my biggest pet peeves when someone claims they “need” something when they simply want it. The purchase of tools is one of my favorite pastimes. Just about every tool on the earth has a use for me. That said, no matter how badly I desire a tool, it will never be a need.
Final word
I need to buy gas to get to work. I need to stock up on food to ensure our family is well-fed and well-cared for. Rent, electricity, and insurance are all on my shoulders. Anything more than that is only a desire. Lastly, some reflections:
An excellent financial goal is to lower your monthly expenses. And the more effort you put in, the better your outcome will be. What if you got out of debt, started living on a budget, and used just a handful of the other strategies I discussed in this Article? It would Be incredible. In this inflationary period, I do not doubt that you might save hundreds or thousands of dollars each month. Start cutting back on your spending right away!