7 Tips to Improve Financial Management During Inflation

Inflation can be a challenging time for anyone, but it doesn’t have to mean the end of your financial security. There are a few key things you can do to protect your finances and even grow your money during inflation. In fact, those with the right tools, information, and understanding of a few key concepts can actually grow their portfolio during inflation and even into a recession.

Please note- we are not financial advisors or planners, so consult with a financial expert before considering any of the below mentioned.

Invest in Assets.

To kick things off, invest in assets that hold their value. This includes things like gold, silver, and other precious metals, as well as real estate and collectibles. There is a solid book on Amazon- Rich Dad, Poor Dad that discusses the differences between assets and liabilities. The goal is to increase the amount of assets, and reduce your overall liabilities. This book argues that a house is a liability- since it costs you money to keep it of value, yet for some their home is considered their biggest asset. In the end, the ultimate goal is to look at what is costing you money, and what is making you money. During inflation seek out ways to develop more assets- for some it can be as simple as renting out a tool, starting a website with affiliate links, or even renting a property.

Invest in Cost Understanding.

Keep abreast and stay aware of changes in the cost of living. This way, you can adjust your budget accordingly and don’t get caught off guard by rising prices. For example, research trends and see what is or could be a needed asset the further inflation goes on, or the closer to a recession we go. Knowing things in advance can set one up to be ahead of the curve.

Buy on the red days, sell on the green days, hold on the in-between days

Invest in yourself.

On of the biggest assets is yourself. During inflation, it’s important to keep your skills sharp and invest in your future. Taking courses, pursuing higher education, and learning new skills can all help you stay ahead of the curve financially. Now is the time to take an online course, read some new books, heck even watch some YouTube videos on creative ways people are finding other sources of savings and revenue streams.

Save, save, save.

One of the best ways to protect your finances during inflation is to make sure you have a solid savings plan in place. Try to put away as much money as you can each month so that you have a cushion to fall back on if needed. We suggest setting up an “assets account” that you set aside money for, and when an investment comes up, you can jump in on it. Cash values deflate, but having a nest-egg to tap into for a money-growth opportunity is important.

Invest in companies that benefit from inflation.

Look for companies that produce items that people need regardless of the economy, such as food and healthcare companies. These businesses always are needed, and in fact up their rates as inflation goes up. Notice how a gallon of milk climbs, gas prices rise, even the cost of most goods go up- so if you can invest in these companies, you can position yourself to ride the wave.

Pay off your debts as quickly as possible

Sure, this seems like a no-brainer, but the idea is to pay off debt as soon as you can, then rely less on interest charging means. Dave Ramsey has a plethora of resources and tips for paying down debt, by tackling one bill at a time, wiping that out, then adding that payment to another debt and paying on that. Repeating the cycle, using only cash to purchase items such as food, groceries, etc will get you closer to financial freedom.

Cut back on unnecessary expenses, like NETFLIX.

Sorry, but it might be time to “Chill on the Netflix” and drop a streaming service or two. It’ not that we don’t like Netflix, but services like this often auto-charge at $8-$10 per month, and times that by a few streaming services, that is eating into income that can be used for other assets. Things like eating out or buying brand-name clothes are also things that should be put on hold for the time being, until you can get a hold of the money that is now being consumed by inflation.

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