We see inflation when the supply of money in an economy grows faster than the number of goods and services for sale. This creates increased demand that results in much higher prices. Inflation means your pay doesn’t go as far as it used to, which could mean tough times ahead for those already struggling to meet basic needs. Here are some financial moves to get ahead of inflation.

Focus on the essentials

A rise in prices means a budget readjustment is a must. Budget for your essentials. This would include mortgage or rent and all of the necessary monthly expenses that go along with your housing, such as utilities. It also includes food, auto upkeep, gas or the cost of public transportation, medical expenses, as well as childcare, and other necessities.

Focusing on the essentials means eliminating the non-essentials. This might include dining out, going to the movies, taking a vacation, and many purchases you may want, but not need. In simple terms, avoid impulse buys and just buy less.

Download a budgeting app 

A personal finance app, such as PocketGuard, a free and easy-to-use budgeting app, helps you stay on top of your money. PocketGuard is highly regarded for helping users better control their spending by setting spending limits for better control. The app tracks income, expenses, and savings goals. PocketGuard’s In My Pocket feature is designed to keep track of how much spending you have available after accounting for bills and other monthly necessities.

Invest in things that will appreciate in value 

While the stock market may be fluctuating, other investments are more stable during inflationary times. Real Estate is a great investment no matter the economic conditions. In fact, it’s a tangible asset that can be held onto for the long term for a great return. Investing in commodities is another way to diversify your portfolio and protect yourself during inflation. There is a wide range that includes precious metals, livestock, and more.

Last but not least, inflation-indexed bonds are another good investment to make to help dodge inflation. These are bonds whose principal and interest rates are correlated with the rate of inflation, so they will see an increase in face value and interest payments.

Focus on debt repayment

Debt, especially variable rate debt, can be costing you more and become a real strain on your budget. With the Federal Reserve continuing to raise rates, it’s important to make debt payments a priority. Rate increases are impacting all variable rate debt, including most credit card debt. The Fed began increasing rates in an effort to combat inflation, which is at its highest level in more than 40 years. This comes at a time when many consumers took on more debt as they struggled during the pandemic. Some lost jobs or faced reduced hours and had to rely on credit cards to make ends meet.

Make a detailed list of your debts and come up with a focused plan of repayment. If you don’t think you can pay it off, you might consider transferring high-rate debt to a lower-rate fixed loan, such as a personal loan or home equity loan. Be sure to check out the completive loan rates at Guthrie Community Credit Union. To learn more, read our blog post “Plan Ahead: How rising rates can make your debt more expensive.” 

Work at earning some extra money to catch up  

Earning some extra money can really help. Taking a second job, picking up more shifts at work, or starting a side hustle can each be a great financial move to get ahead of inflation. Driving for a meal delivery service such as UberEats or Doordash can be a great option. You can also take advantage of a hidden talent or hobby to create a side gig for yourself that you actually enjoy.

We hope these financial moves help you get ahead of inflation and will keep you financially stable through these turbulent times. To conclude, by both reducing your expenses and increasing your income, you could get ahead and stay ahead.