4 Ways To Shield Finances Against Inflation
When inflation runs high, it can feel like you’re in a financial fog that refuses to clear. But making sound, forward-thinking decisions can reduce money pressures even as prices soar. Use these tips to gain clarity during challenging economic times and make the most of every hard-earned dollar.
1. Increase Your Earnings
Working additional hours for your current employer or starting a side hustle could give you the funds needed to bridge the financial gap caused by rising prices. If time is limited, pursue other ways to increase your income. Some options include updating your W-9 Tax Withholdings or renting out space in your home.
These actions may be necessary only for a short time. Depending on the size of the earnings bump, you may also find yourself with extra funds to put toward achieving other financial goals.
2. Adjust Your Expenses
Inflation diminishes your purchasing power. However, you can ensure you have enough money to cover bills by spending less on both optional and necessary expense categories. For example, pause or eliminate entertainment, such as streaming subscription services. Necessary expenses, like housing, utilities, and groceries, are categories that offer additional opportunities to save money.
For example, you could:
Find a roommate to reduce out-of-pocket housing expenses; Reduce electricity costs with tips found at energy.gov; and Save on groceries by purchasing store-brand products and using manufacturer coupons available online, in newspapers, and at coupons.com.
3. Boost Your Savings
Use the funds earned from boosting your income and reducing expenses to bump up your savings balance. This financial cushion could help cover unexpected expenses that might otherwise be added to a high-interest rate credit card. Start small with a savings target of $500 and gradually build an emergency fund equal to six months of living expenses. As your savings balance grows, the more financial confidence you’ll have as economic markets change.
4. Reduce Your Debt
Lower your debt payments by reducing the finance charges assigned to your mortgage, credit cards, and other loans. If you have good credit and a stable income, you might be eligible for a low-interest rate consolidation loan that could save hundreds of dollars every month. You can maximize savings by also extending the repayment period. Remember that while you can take longer to repay the loan, the extra time comes at a cost.
It’s possible to regain visibility despite the murkiness of economic uncertainty. We invite Call Federal members to partner with a Certified Credit Union Financial Counselor to create a personalized plan to improve financial security.
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