10 Expert Tips for Beating Inflation

It looks like we’ll experience a prolonged period of rising inflation and subsequent interest rate hikes. The federal government has already taken economic measures to tackle inflation, already reaching 7.9%, and the journey ahead still seems turbulent. 

Most of us interpret inflation as pain infliction. Having your savings’ value erode by 10% and the need to stress your household budget is nothing to smile about. Interestingly, even borrowers who expect inflation to significantly reduce the value of what they owe suffer when the government responds by increasing interest rates. 

So, what can you do to survive this historic inflation and maintain solid personal finance? Find out from the inflation tips below. 

Best Inflation Tips

1. Get Some Expert Help 

If you’re reading this, you’re on the right path to beating any inflation rate. Sometimes, money management can be challenging, and you need a third-party and professional view to maneuver meticulously. Internalizing these and other tips you get from a financial expert will make your challenges more manageable. At Personal Finance Tips, we have crucial advice on inflation, mortgages, investment, savings, and more. Alternatively, consider consulting an independent financial advisor if progressive action still proves a hassle. 

2. Refinance Your Mortgage

Rates are rising steadily, and mortgage value has surpassed last year’s mark. Our financial institutions also hint at the process continuing and probably exacerbating if the economy doesn’t settle. So, if you have a house mortgage, it’s wise to refinance for a longer period for the lowest rates possible. 

3. Review Your Investment Strategies

When inflation behaves like it is right now, it’s better to invest than save money. Your saved cash will end up degrading in value while some investment experience a value boost. But with the less attractive bond investment, how do you invest?

Only choose index-linked bonds where the interest aligns with the inflation rate. For example, the oil and mining industry may yield higher profits as rising prices improve their bottom lines. However, when prices increase, households tighten their belts, leaving retailers in despair. 

4. Avoid Locking Your Savings

When the federal government increases the interest rate to curb higher inflation, it should benefit the savers. But although the savings ratings are rising, they’re still far from closing the gap caused by inflation. The best solution would be to keep your savings manageable for the long term because you could miss better rates brought about by the imminent interest rates and better savings deals. 

5. Focus on Retirement Income

Apparently, inflation affects your savings significantly. The dough you rake in during your golden years could become scant after a few years of inflation. If your retirement annuity is at a basic level, your money value will decrease yearly. In contrast, an annuity linked to inflation will start paying low values and increase with time. Whatever your plan, you need to keep the savings more flexible to ensure you don’t run out of cash in the future. 

6. Adjust Lifestyle and Spending

Inflation affects sectors differently, but simple financial strategies can keep you safe from the surge. One way to increase your savings and brace for tough economic times ahead is to avoid discretionary spending. Other lifestyle habits, such as minimizing prepared food deliveries and cooking at home instead, will take you a long way. 

7. Diversify Your Portfolio

Like missteps and mismanagement, economic turbulence too can change a business, whether the problem is households reducing purchases or shutdowns to curb a deadly pandemic. Review your investment strategies and deal with what matches the economic forecast. By rebalancing the portfolio, you yield from high-performing sectors and buy the struggling ones on sale. 

Treasury Inflation-Protected Securities (TIPS) come in handy when you want to diversify. The securities protect you against inflation, so you receive a lucrative principal amount when they mature.

8. Don’t Panic

Whatever the situation, it’s advisable not to make rash decisions as rates hover. You don’t want to fall into a stock market trap just because you saw a rapid market fluctuation. Such an investment comes with risks and could adversely impact funds meant for long-term results such as retirement. 

9. Earn Cash Backs

If you’re planning to buy a new home, car, or gifts for the holiday, consider getting a cash-back card. Many of these cards come with generous offers on items like groceries, gas, and books. Current cash back cards average a 3% reward on different categories, providing unimaginable ways to earn extra income and survive inflation. 

10. 10.Re-evaluate Insurance Coverage

Does your coverage still fit your needs? Check whether you can make a few adjustments to your monthly or annual deductions to reduce the stress on your budget. Whatever the change you make to your contributions, it should not leave you paying out of your pocket in the event of repair or accident. 

Brace Inflation

The turbulent economic situation is inevitable, and the inflation tips shared here will keep you afloat throughout. Check out more resources on saving money, making extra income, and keeping off debts. 

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