Ways to Beat Inflation

As the cost of living continues to rise, it’s important to learn how to protect money from inflation. Inflation can erode your purchasing power and make it challenging to maintain your standard of living. 

Knowing the strategies discussed here, though, can help protect money you earned from inflation. Learn the best ways to protect yourself from rising prices here.

5 Ways to Beat Inflation

The truth is inflation is a fact of life. It can be difficult – though far from impossible – to learn how to protect against inflation and ensure your hard-earned money isn’t impacted. The following are various steps you can take to ensure your finances remain secure in the face of rising prices.

1. Track your spending

The first step in beating inflation is tracking where your money goes each month. This can help you identify areas where you might be able to cut back or find more efficient spending habits so you have more money available for savings or investments.

Make sure to keep track of both fixed expenses (like rent) and variable expenses (like groceries).

  • Track your average monthly spending
  • Review purchases and spending – is everything warranted and necessary?
  • Be strategic with purchases – buy generic, use prescription cards, turn in points, and sign up for rewards

2. Find places to save

Assess every dollar – you’ll likely find many places you can save (or eliminate spending altogether). Saving money is one of the best ways to beat inflation. Inflation can make it harder to afford necessities like food and housing.

Once you’ve identified areas where you can save, look for places to put those extra funds away for safekeeping. Consider high-yield savings accounts or certificates. Both often offer higher interest rates than traditional bank accounts and protect against inflation over time as the value increases with market conditions.

  • Switch your cable/internet/phone provider
  • Bundle plans (car/homeowners/umbrella insurance policies)
  • Audit your subscriptions and cancel any you don’t use
  • Transfer balances to introductory low- or no-interest cards
  • Make big purchases on deal-days – like Black Friday/Cyber Monday (BFCM), holiday sales, etc.

3. Find additional income streams

Finding additional income streams (sources of income) can help offset the effects of inflation. Passive income, for example, can be a great source of extra money. Passive income involves making money without actively or regularly working for it – think rental properties or investments in stocks or bonds.

While passive income requires an initial investment, once you’ve made it, you don’t need to put in any more effort than occasional maintenance or management tasks. Another option is monetizing your hobbies or interests. For example, if you enjoy writing, consider starting and monetizing a blog through ads or affiliate links; if you like crafting, look into selling handmade items online. You may even find yourself turning something you love into a full-time job!

  • Sell clothes
  • Start an e-Commerce or dropship business
  • Monetize your hobby
  • Go the gig economy route (drive for Uber or Lift, for example)

4. Make saving a habit

Making saving a habit is one way to make sure your money retains its purchasing power over time. To do this, try setting up automatic transfers from your checking account into your savings account each month.

You can also set up recurring deposits, like with Island Federal Credit Union’s online banking service for regular savings accounts and certificates. This means you can save regularly without having to remember or manually transfer funds each month.

5. Invest in real estate

Real estate investing is a great way to protect money against inflation and build wealth. Real estate investment can provide you with steady income and offer potential tax benefits and long-term appreciation of your assets.

You must do your due diligence and research before investing in any property to understand any risks involved. When it comes to choosing an investment property, location is vital. Look for properties in areas that are expected to grow over time or have high demand from renters or buyers. You also should consider the condition of the property and its current market value when making any investment decisions.

Final Thoughts

Fortunately, there are several ways you can beat the effects of inflation and keep your money safe. By tracking your spending, finding places to save, creating additional income streams, making saving a habit, investing in real estate, you can protect yourself from inflation.  

Island Federal Credit Union can help you protect money and your finances from the effects of inflation with our wide range of services and products. Our knowledgeable staff is ready to offer personalized advice on managing your money so you won’t have to stress about keeping up with the rising cost of living. 

Visit Island Federal today to learn more about how we can help you protect your finances from inflation!