Inflation is hitting people hard across the US and around the world. Most see only the rising prices, and are ready to lay all the blame at the feet of corporate greed. Unfortunately, such price increases are only a symptom of inflation. The real problems are direct money supply inflation by national banks like the US Federal Reserve, and credit expansion through artificially low interest rates designed to "stimulate" the economy paired with fractional reserve banking. Fundamentally, the real problem is more dollars chasing the same goods and services, resulting in a shift in the supply/demand curve. The inflated money supply is the root problem.
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I'm not sure about the assurances we get from the government data here in America. The officials insist the Consumer Price Index isn't really all that bad, but something's fishy. Fast food prices have roughly doubled in the last decade, local housing prices have easily tripled, groceries have increased anywhere from 25%-100% just since COVID, used cars are insanely expensive, new pickup trucks are ballooning in price faster than they balloon in size, and so on.
Inflation not only raises prices for our day-to-day expenses, it also distorts long-term planning for any economic activity. Volatile prices are a significant extra variable for entrepreneurs, people saving for retirement, investors trying to account for future needs, and farmers planning the next annual crop cycle. We can't control inflation, but we can take steps to reduce how severely it impacts us. I'm not predicting an increase in inflation rates, but there is already pushback on rising interest rates. People want easy credit and its accompanying illusion of prosperity. Even the slight semblance of signalling real market time preference by central banks is showing how little substance our current "prosperity" has.
Not all of these solutions will apply to everyone. Some people already live by these principles. Some will be unable to take advantage of all options. But almost everyone can start with this first tip.
Get out of debt
Pay off your credit cards. There is no way rising inflation will help you get ahead of their interest rates. Pay down the smallest debt with the highest rate. Bundle the savings from ending that payment into paying down the next. Continue until it's all gone.
Pay off your car loans. Buy used instead of new. Squirreling away some money for car repairs on an older model is far cheaper than paying retail for a depreciating asset.
For many people, a home loan is the biggest debt they have. Paying off a 30-year mortgage early can save a lot of money, but this is a big project for when everything else is sorted. Just make sure you aren't in a balloon mortgage or otherwise vulnerable to interest rate swings.
Get more work
Seek more hours if you can. Consider a second job. Start looking for a new job. Be ready to negotiate for better pay. Everyone is in a different situation, but for many people the easiest way to escape financial uncertainty is by building a better income.
I am very well aware that health problems or other personal circumstances can be an obstacle. Remember, this is intended to help you consider options that can help you take control instead of being swept along. Everything must be considered in light of your circumstances.
Kick addictions
Tobacco, alcohol, gambling, and even marijuana in many states like Washington are legal and popular vices. I don't want to be a Puritanical killjoy, but these are often major expenses, and to add insult to injury, also heavily taxed by government. I enjoy a bit of booze once or twice a week myself, so I'm not asking anyone to quit cold-turkey, but please engage in some serious self-examination. make sure you are in control of your vices, and they are not in control of you.
D.I.Y.
Cook more meals at home. Save money and improve your nutrition. Cooking can even be fun! I enjoy finding new recipes to try, and having food at home also helps me prepare for emergencies. You can save even more by buying ingredients in bulk, provided they are ingredients you can actually use before they expire. Rice and beans store well and offer excellent nutrition while serving as a basis for many different flavors, for example.
Handle your own home maintenance and landscape work. Change the oil in your car yourself. Replace electric receptacles yourself instead of hiring an electrician. This doesn't mean you have to become a jack of all trades, or excuse spending loads of money on new tools and gadgets, but this mindset taken one step at a time can help make you a more capable individual while saving you money, provided you understand your limitations and remain willing to swallow your pride and call a pro before you get in too deep and make something worse.
A Do-It-Yourself ethos can be taken too far, but learning new skills and taking more responsibility helps you grow as an individual while you save money. Check your local library for everything from recipe books and home improvement guides to detailed databases of information.
Diversify
Dollars, Pounds, Euros, Yen, etc. can fluctuate against one another, but we also have options ranging from newfangled cryptocurrencies to stocks to old-fashioned bullion. Your risk tolerance and the time you can put toward any given option are limited, so again, I don't encourage everyone to dive into everything. Be open to opportunity, but don't risk anything you can't afford to lose, either.
Educate yourself
Whether you want to get a better job, learn new skills at home, explore investment opportunities, or help your kids with homework, it's always a good time to learn. The internet is a treasure trove of information from wikis to podcasts to blogs like HIVE. Your local library is full of books and other resources. Elders in your community may be looking for younger generations willing to learn from their wealth of experience. make learning a lifelong endeavor, not just something that stopped once you earned a diploma.
Your turn
What is your advice for saving money, making money, and disconnecting yourself from a system that seems designed to use you up as fuel for the ambitions of the political class?
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