With many issues on our shoulders today, including the COVID pandemic and other global stressors, inflation has hit the United States at an incredible rate over the past couple of years. It can raise a look of immense confusion on anyone’s face when the topic comes up in conversation, especially with the many directions it has quickly turned throughout the news. Markups have arisen on things as simple as our groceries and household products. The things we buy on a regular basis every month have increased our regular expenses so quickly over a couple of years, placing a dent in our bank accounts without us realizing it. Even larger, with the cost of fuel having inflated probably the largest over the past couple of years, the overall inflation of other services has grown with the billing sent forward by companies and the expenses they forward for transportation and other costs.

Dating back to about November of 2021, U.S. inflation was reported to be about 6.2%. Even though there was a great report of a high number of job availability, it still could not overlap the increased costs that have come about for the increase of products and services. Even more, a slight pay raise may not overcome the inflation of your expenses that could result from the overall increased costs of products and services due to all the members of your household. So, it is helpful to follow some other key financial tips to help stay ahead of inflation. Here are 5 key tips to help stay ahead of inflation and keep your finances under control regarding your investments for retirement:

  1. Earn more than the inflation rate – A golden rule to stay ahead of inflation may come along with investing for the long term. You can make sure that your investments have a higher rate of return than inflation is taking away. Evaluate your investments; if this is not the case, it may be a good idea to look into changing them to a new investment source with a higher return.
  2. Consider assuming more risk with your investments – Another way for your investments to return at higher rates is to take on those with a higher risk. It may be more helpful if you are not retiring in the next five years, and the return may come your way in the longer term. You could always move them to more stable investments later to ensure you are prepared for the end return.
  3. Start saving early – As the good old say goes, “It’s never too early to do something good.” So, investing early is smart for many reasons, including the greater return to accrue in the long run and the fact that you may get your returns accruing before the inflation rates start rising above them. The basic answer: The earlier you start investing, the earlier you have the money to withdraw.
  4. Look for inflation funds – Certain financial advisors provide certain suggestions for investing in specific funds that base investments on inflation-based assets. These could require caution and research, but it could be a good idea if you are getting in early and allowing time for the long-term investment to provide you with a strong return. The purpose of these is to get in before an inflation period begins and to allow it to balloon up after the inflation dies out. It follows well with the idea of starting saving early.
  5. Consume less – An overall positive idea is reducing your purchasing urges during inflation. The result of inflation is that it reduces your buying power in general anyway. So, it helps if you make an effort to decrease the goods that you purchase by keeping your spending constant and trying to decrease what you buy regularly.

With these tips mainly focused on investments, there are still some other basic ideas that can help you improve your monthly expenses during times of inflation. While we have a rapid real estate market at this time, you may be buying a home. It is helpful at this time to lock in fixed rates for home loans and other debts at this time to help keep your payments as steady as possible. It may also be helpful to closely evaluate large purchases like cars, appliances, and others that may be highly inflated over standard retail value at this time. It could be helpful to make several comparisons before deciding on a purchase and allow plenty of time before making a purchase decision. It could also be helpful to evaluate investing in commodities as inflation begins, with their increased value during inflation. And you should also watch out for keeping too much cash or more than 6 months’ expenses in basic savings account sitting around for unplanned expenses, as it may likely be losing money well below the inflation rate.