Inflation-Proof Your Finances

With constantly changing costs of many daily essentials, it can seem impossible to feel secure financially. Just when money seems manageable, the costs of groceries or gas or housing increases, and we lose grasp on our finances. It can feel like we are powerless to protect our financial future. But there are ways to prep for the recession-inflation cycle.

Here are some tips that can help inflation-proof your finances:

1. Prioritize building up financial reserves. 
   - Set aside 3-6 months of living expenses. Expect this to take some time, but it is possible if you make a commitment to focus on it. 
   - Have savings set aside automatically. Automatic payments play a beneficial trick on us mentally and create a boundary for our finances that help us stay consistent. When we place funds in a savings/separate account from our main spending account, we are more likely to operate financially as if those funds do not exist allowing them to accrue interests and build up overtime. 
2. Get rid of high-interest debt: The key is to make sure there is more coming in than going out. Credit cards are a main source of high-interest debt. Each month, interest adds up, costing hundreds of dollars each month. Credit cards often carry interest rates exceeding 18%, making them one of the most expensive forms of debt. Paying them off quickly can save you significant amounts of interest. Consider debt repayment strategies: 
   - Focus on paying off debts with the highest interest rates first. 
   - Pay off the smallest debts first to gain momentum.
   - Explore consolidation options: Balance transfer credit cards or personal loans with lower interest rates can simplify payments and reduce interest costs.
3. Have a super clear plan to pay for things before purchasing to avoid debt. Financing options can be super attractive when we want to receive a product before it is paid in full. This option has caused incredible financial strain for many Americans. Buy now, pay later has lured many into large amounts of debt. The key is to avoid buying daily resources until you can pay them with cash. 
4. Build up your credit and pay bills on time. Keep debts low and focused on big purchases such as a mortgage. A strong credit score can provide access to better financial opportunities and lower interest rates. To build and maintain good credit:
   - Pay your bills on time, keep credit card balances low, and avoid taking on unnecessary debt. This not only improves your financial standing but also offers greater flexibility during times of need.

5. Choose to invest in inflation-proof assets. One such example is real estate. For more ideas, seek out financial advice from professionals to guide you in making good financial investments. Finding good help can be difficult as there are many voices encouraging people to do many things. 

Don’t know where to start? Reach out to Union EAP for help — that’s why we’re here, to point you in the right direction.

Feeling financially secure can seem impossible in modern times, as the economy seems increasingly unpredictable. Implementing these strategies and consulting professional financial advisors can help protect your finances from the ever-changing financial landscape. 

Financial stability, like everything else, follows the same truth; short term discipline leads to long-term freedom. Being disciplined in our finances in the short term leads to the financial freedom that we all desire.

Call us today at (855) 500-1915 or email at info@unioneap.com

In Solidarity, 

Dr. Calvina Ellerbe

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