How to Prepare During Inflation

Inflation hurts your pocket whether you have debt or not. That’s evident when you go to the grocery store and see the price increases of most items. The gas price has risen, so the delivery costs to the store have increased, and the retailer has passed down the cost to you. Knowing how to prepare during inflation will provide some relief during economic hardship.

What is inflation?

The common definition of inflation is a general increase in the price levels of goods and services, but I define it as a tax on people. Because that’s what it is. Prices ‘inflate’ because of excessive government spending, money printing and bad policies. And you’re paying the price for their mistakes.

To combat inflation, governments usually increase interest rates.

That means you pay more for your debt. If you’re not in a position to pay off your debt immediately, you’ll have to obtain money to service it. Getting a side hustle is one solution, but it can take time. You need an immediate solution.

Lower your expenses

You know that you should live below your means, even in good times. But it’s essential for you to make lifestyle adjustments during inflation.

Consider moving to a more affordable area. This is especially feasible if you work remotely. Otherwise, you can rent out a spare room or move in with someone. I did it, and I managed to reduce my rent in half.

If efficient public transport is available, sell your car. Not having monthly car expenses is likely to save you at least $500. Every dollar counts, and you need it during inflation.

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Forget about eating out, buying new clothes and going on vacation. It’s out of the question.

Analyse all your other expenses and come up with solutions to reduce them. You can reduce every expense and eliminate non-essentials—unnecessary for survival.

Expenses such as alcohol, cigarettes and entertainment such as video streaming services and other subscriptions are non-essentials.

Sell your stuff

If you can’t get an extra job immediately, you need to sell your stuff. Consider doing that even if you have extra work. You don’t need your golf clubs, 5 pairs of shoes and tools you never use.

Walk around your house, garage and every other area with pen and paper and make a list of all the items you can sell. You don’t need your stuff; you need money. Inflation is a major burden on everyone, and you can increase your chances of surviving it by having money.

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One of the easiest ways to acquire money is to sell the stuff you don’t need. Organise a garage sale and advertise your stuff online.

It’s not necessary to have an additional TV, tablets and gaming consoles. They need to go because you need money. Don’t forget to sell your pet as well. Having a pet means buying food, paying for grooming and visits to the vet, which you cannot afford during tough times.

No more debt

You don’t get out of a hole by digging it deeper. That means you cannot take out more debt. You should be paying off debt so that you have fewer payments. When you don’t have debt, you have money.

I would not recommend financing expenses with a credit card, even if you plan to pay it at month-end. It might not work out that way, which leaves you with more debt. Don’t make the situation worse by owing more money.

You might feel that you’re up to your neck in expenses and that a credit card will relieve some of that stress. It won’t. If you reduce your expenses and sell your stuff, you’ll have more money. That will help you avoid the temptation of credit card purchases.

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I shouldn’t need to tell you that you must pay all your debt, except the house, as soon as possible. If you must keep your financed car, I would recommend making that the first debt you focus on, even if you have other debt with a lower balance.

Used-car monthly payments in 2022 were on average $500 in America, and payments for a new car were $700. Not having that monthly payment gives you significant breathing room.

Work like crazy

During inflation, and while in debt, you should have at least two jobs. Ask your full-time employer for overtime and find a weekend job as well. The more income streams you have, the better. Not only do you need more money during inflation, but you need to have a backup income, in case you lose one of your income streams.

Many people lost jobs in big companies in 2022 and the beginning of 2023. It can happen to you, and you don’t want to be without any income if one employer decides to let you go.

The other advantage of working all the time is that you have little time to spend money. You want to be distracted so that you’re not focused on how you can spend money.