Money Management Tips For Inflation

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Last updated on August 23rd, 2023

The U.S. Labor Department recently announced the current inflation rate for May 2023 stands at a high of 4.9%. The topic of inflation has been a popular one in recent times due to the world’s current events affecting the economy. Understanding how to manage your money in preparation for inflation is the move you want to make. Consider these money management tips for inflation in 2023.

How To Prepare for Inflation

There are a couple of actions you can take to improve your money management during times of inflation. The following tips can help extend your money, stretch your budget, and save more.

Grow Your Emergency Fund

Whether or not inflation is on the rise, an emergency fund is a must, recommended by financial experts. An emergency fund should be worth three to six months of your essential expenses. Your budget should also plan for recurring contributions to an emergency fund just as you would a regular savings account. In return, you benefit from disciplined spending habits which can help you save more in the long run.

It helps if you think of your emergency savings fund as a bill to contribute monthly. You can also cut spending in other areas of your budget to help boost an emergency fund. With the security of an emergency fund, financial life challenges will give your wallet grace.

Continue Investing in Long-Term Savings

While it may seem counterintuitive, maintaining steady investing efforts in long-term savings should remain a priority. “Panic-selling” a stock portfolio is not always the answer. Returns in the stock market fluctuate each year. However, holding onto your investments over time can help.

According to Business Insider, the S&P 500 has gained, on average, 10.7% annually since introduced in 1957. Similarly, but better, the index has done slightly better in the past decade, averaging an annual 14.7% return. In other words, don’t get rid of your 401K just because inflation is on the rise. Continue any retirement savings without hesitation.

Take An Interest In The Bond Market

Other investments keep up with inflation, for example, I-bonds, a type of Treasury bond. These kinds of bonds are connected to the Consumer Price Index, meaning the interest rate gets adjusted every six months based on current inflation rates.

The downside is you can only invest up to $10,000 electronically each year. Likewise, another government-backed bond that adjusts to inflation is the Treasury Inflation-Protected Securities (TIPS). These may be purchased through the TreasuryDirect website, a bank, or a broker.

Opt For A Cash Back Credit Card

When you’re making your dollar stretch during times of inflation, it doesn’t hurt to earn a little money back for your overpriced produce or the weekly fill at the gas pump. With a cash back credit card, you can get earnings back for everyday purchases. The credit card market has various rewards cards options suited for every need. Some cards have customized cash back categories like the Citi Custom Cash℠ Card, which earns up to 5% cash back on purchases.

Related Article: Fight Inflation with Cash Back Credit Cards

Get A High-Yield Savings Account

Consider opening a high-yield savings account to increase earnings on your rainy-day money. Why have your money in a regular savings account when it can grow in another? A high-yield savings account earns compound interest on any savings in your account. Inflation has driven banks to raise the earning rate of high-yield savings accounts. Today you can find rates as high as 4.81% APY, like the Upgrade’s Premier Savings account or Synchrony’s High-Yield savings account.

Keep A Budget

A useful tip to follow when it comes to managing your money during inflation is to budget everything. Budgeting your funds acts as a guide and outlines where all your money gets allocated. Keeping a budget can help you prevent mindless spending, which can take away from funds you may otherwise add to your savings. When you budget, you get a birds-eye view of your finances, such as your income and monthly expenses.

Related Article: How To Manage Money With The 50/30/20 Budget Rule

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About: Jeannyn Gomez
Jeannyn Gomez

Jeannyn is the Content Management Assistant for In addition to serving on all aspects of social media and spreading the word on expert credit and personal finance advice, Jeannyn finds herself on quests for humor, supernatural phenomena, and conspiracy theories for fun.

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