15 Ways to Stay Financially Secure During Inflation

Inflation is higher than it's been for 40 years, and Americans are facing around a $4,100 increase in costs as a result.

When the price of goods and services goes up so much, this can obviously put a strain on your budget. But the good news is, there are steps you can take to ensure higher costs don't hurt your ability to make your funds stretch far enough to cover today's costs and fulfill tomorrow's goals. Here are 15 of them.

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With the cost of goods and services rising, you'll need to adjust your budget accordingly.

You may need to cut out some discretionary spending in order to free up cash for higher expenditures in essential categories, such as food and heating or cooling costs.

If you don't already have a budget, making one is more important than ever so you can allocate your limited funds wisely as prices increase.

ALSO READ: Should You Rethink Your Budget in 2022?

Investing can help you offset the impact of inflation as the higher the returns you earn, the less the buying power of your savings will decline.

You'll want to make sure you aren't hoarding too much cash as this money will lose value quickly when inflation is surging.

If you have an appropriate percentage of your money in the market -- and you research assets carefully to build a diversified portfolio -- you can hopefully earn returns that top the inflation rate so your real wealth will still grow.

Keeping track of where your money is going is crucial to see if you're still able to stick with your budget and keep your costs below your income even with higher prices.

If you find that you're forced to spend so much that you'll have too little left to save -- or even that you'll end up in debt -- big lifestyle changes may become necessary to avoid losing ground. This could mean doing things like finding a roommate or going from a two-vehicle house to a one-vehicle home if it's possible to do so.

ALSO READ: 3 Benefits of Tracking Your Spending

Checking accounts and savings accounts tend to offer interest rates that are well below the current inflation rate. As a result, any cash you have will end up losing value.

This doesn't mean you shouldn't still have an emergency fund. But you do want to avoid keeping more than necessary in savings accounts paying a low rate.

Since you should keep some money in savings so you have liquid assets you can access when necessary, it's worth making the effort to shop around carefully for the right account.

Some high-yield savings accounts provide much better rates than others do, and it's especially important during surging inflation to earn the most interest possible on your savings.

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Timing your purchases carefully is important to make the most of your money and avoid losing ground during inflation.

For example, certain consumer goods such as cars have seen huge price increases due to supply chain issues. If you don't absolutely need a new vehicle right now, it may be smart to put off your purchase for as long as possible until semiconductor shortages are resolved and car prices hopefully fall.

ALSO READ: These 2 Auto Supply Stocks Could Benefit From Inflation -- Here's How

One way to combat rising prices on consumer goods is to opt to buy used instead of new items when possible.

Instead of hitting the store when you need something, check garage sales, online classified ads, and thrift stores or consignment shops. You can keep items out of landfills while also keeping your costs down.

Avoiding unnecessary shopping can also help you to redirect more money toward covering essentials that have seen rising prices. And you can avoid paying an inflated amount for any unnecessary items if you simply skip the purchase.

Before you buy anything, see if you can repurpose what you already have. And wait 24 hours before making nonessential purchases to ensure that the item is really worth spending your hard-earned dollars on during these turbulent times.

ALSO READ: 4 Signs You're Overspending on Your Credit Cards

Looking for cheaper alternatives can also help to make your money go further even as prices rise. For example, if the cost of beef or chicken has gone up dramatically, you could switch to pork or serve more plant-based meals.

Always look at all of the options available to you when making a purchase so you can see if there's a substitute that would meet your needs at a lower price point.

Coupons can reduce the cost of items you're purchasing, even as their prices have climbed. Online coupons as well as coupons in the Sunday paper can all help to save you money and reduce your bills.

Be sure to check for coupons before buying so you can take advantage of opportunities to save on all your everyday items.

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With food costs rapidly rising, keeping your grocery bill reasonable is crucial to minimize the impact of inflation on your budget.

Batch cooking may help. This involves making large meals and freezing some for later. It can help you reduce your food costs if you build your big meals around what is on sale or if you buy in bulk or when you have a coupon.

By keeping a bunch of meals in your freezer to grab easily, you may also be less tempted to eat out, which can also free up some room in your budget.

ALSO READ: Can Online Groceries Keep Meal Kit Companies Growing?

Employers across America are struggling to find skilled workers, and companies are working harder than ever to retain people during a tight labor market. As a result, it's a great time to ask for a raise.

If you can get your company to pay you more, the added income you have coming in can help you to avoid losing ground as prices rise.

Looking for a new job could also be a great way to increase income -- especially with so many businesses desperate to hire.

Explore opportunities in your area by visiting career fairs or checking online classifieds. If you are offered a new position, be sure to negotiate your initial salary offer to get the best starting wage possible.

ALSO READ: The Great Resignation: How the Pandemic Is Impacting the U.S. Workforce

Local farms and businesses may not have been impacted as much by supply chain issues and labor shortages. As a result, shopping local could potentially help you avoid the big price hikes that many stores are putting in place.

Finally, you should be aware that high inflation is prompting the Federal Reserve to raise interest rates. If you have variable-rate debt, this could mean that you find yourself facing higher financing charges.

You may wish to look into refinancing into a fixed-rate loan to avoid seeing your borrowing costs go up.

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Inflation can undoubtedly make budgeting harder and can eat away at the value of your savings.

But by following these 15 tips, hopefully you can keep your spending in check and find other ways to minimize the financial consequences of rising costs.

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