A Couple of Ways to Deal with This Inflation

While it is true that the April 2023 inflation numbers dipped to 4.9%—still relatively high—it's much better than when inflation hit its peak of 9.1% back in June of 2022. So, while the rate hikes that the Fed began a little over a year ago seem to be helping curb consumer costs a bit, we're not out of the woods yet and things still cost more.

Mortgages, for example, jumped from 2.6% to around 6.3% for an average 30-year fixed rate loan, and credit card interest has jumped to a record average of around 21%.

There is also the question of whether or not we may still see a recession. Something we have not seen yet, but most economists would suggest that between inflation and rising interest rates, it may be sure to come despite any effort by anyone to try to avoid it. And while a recession is not good, and it's not the end of the world, it would not come without some additional pain as layoffs would likely occur, further stressing American's bottom lines.

On the flip side of this, as rates have risen, so have offered interest rates on certain bank accounts. Savers are getting the biggest bang for their bucks, benefiting the most from banks that offer so-called high yield savings accounts. So, looking into some of them, especially online, may be worth looking into if you have some money tucked away somewhere not getting the best rates. It would be worth the time to shop around as well since not all high interest banks are good.

Ally Bank for example, offers a 3.75% current rate, and CD offerings are northward of 4.5%. That's quite a bit more than the national average of 0.39% even if 3.75% still doesn't come near to beating inflation, a key factor when determining how to get the best bang for your buck.

Capital One also offers 3.75%. Barclays is giving 4%. And there are several others. You can go online and do a quick search to find the best rates and do some bank comparisons.

Beyond that, you really have to know your prices when you shop, and you have to be quite a bit more vigilant about shopping around, even visiting multiple stores to get the best deals on most things—especially food and common household items.

Make shopping lists, maintain a good inventory, and stock up on good deals as often as possible. This will also help to determine where you shop based on who has the best price so you don't have to visit multiple stores all at once. When inflation is tugging at your purse strings, every penny counts more than ever.

Of course, a money related post from me would never be complete without mentioning investing. Dividends are a great way to create new money—it is literally income. And besides, you should be invested anyway. If you are not familiar with investing, a very valuable book to read, and well worth the time and money, would be The Intelligent Investor by Benjamin Graham. Creating money from money you already earned is a great way to at least hedge against rising costs.

One thing taking a significant bite out of people's pockets is also the cost of gas and diesel. Why not try to earn some cash back on some of that, and the Upside app lets you do just that. Plus, they also offer cash back on certain grocery stores and restaurants. I have used this app for some time and I have to tell you the savings do add up—and again, every penny counts.

On top of that, doing everything you can to reduce debt at a time like this is paramount. As I mentioned earlier, credit card rates are tipping the scales at 21%. Not only should you pay some of that debt off to save pennies, but you should also be less inclined to use credit to offset expenses caused by inflation. Borrowing when rates are higher, and inflation is through the roof is a good way to compound the problem. So, simply don't do it.

While it may be a more difficult thing to accomplish, provided your company is not laying people off or otherwise enduring other struggles financially, this may be a good time to ask your boss for a raise. You'll want to do some analysis so you can present a reasonable proposal, but the fact is that businesses already understand the impact of inflation on their bottom lines and won't hesitate to raise prices to help get through it. You are as much well within your right to ask for more as they are.

Like the way I write or the things I write about? Give me a follow on my Facebook page where I post articles I write here and in other places. Want to send a donation to support what I do? You can PayPal me here.