The Soapbox: Surviving inflation and rising prices

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Stand up. Speak up. It’s your turn.

We are living in challenging times.  Record high gas prices.  Energy costs soaring as inventories shrink.  Retail prices for food and basic goods have jumped. And recently the Federal Reserve announced it will begin a series of interest rate hikes designed to stem the rise of inflation in the U.S.  That decision means it will cost more to borrow money for a home or a car or other major purchases.  The cost of living is going up substantially.  Economists may start using the term hyperinflation, which obviously sounds scary and can trigger the kind of run-on limited goods and services we saw at the beginning of the pandemic. It is typically based on war or current events.

The truth is nobody’s wallets, budgets or bank accounts are immune to current events… but you are not helpless.  Here are a few ways to save your resources and grow your savings during unpredictable times:

  • If you are already getting ready to make a major purchase, the sooner the better.  Inflation rises both prices and the cost of taking loans, so set your rate before they climb again and make your money work more for you.
  • In the meantime, be smart.  Focus more on needs instead of wants.  It’s best to invest in your necessities and keep the wish list on the table for when the current economic climate shifts.  And by the way, what goes up, must come down.  Don’t panic.

As a career credit union CEO, I spent years helping families and businesses find ways to save their resources while achieving their short- and long-term goals.  For what is typically a low-level membership cost, these non-profits can provide lower interest rate loans and higher yield savings plans than traditional banks.  It’s worth exploring ways to save a few extra dollars a month in your account.

Make a budget and stick to your plan.  Uncertainty breeds ill-informed decisions.  Pay attention to the economy, determine what your basic and bottom-line expenses are and cut the fat.  Excess spending during uncertain times is a little like throwing dollar bills into a hurricane.  Don’t do it.

For those of you who have money invested in markets, stay in touch with your money managers, and consider shifts into safer bond-related financing options for savings.  Sometimes it’s best to steer the boat to a safe harbor while the storm passes through.  It may extend your timeline for the retirement finish line, but a few small adjustments can also steel yourself against sudden jerks in the market.  Just remember, invest thinking about the long-term, not what’s going to happen next week or next month.

If you are looking for good news, there’s plenty to find.  Unemployment remains low.  Wages are competitively higher than they have been in many sectors.  Demand for goods and services remains as well.  

Here are a few other ideas for how to boost savings, reduce expenses and your return as interest rates rise:

  1. Record your expenses.  The first step is to start saving money is figuring out how much you spend.
  2. Prepare a budget to include a savings plan.  Eliminate unnecessary expenses and reduce other expenses where possible.
  3. Reduce your energy costs such as on your electric usage and reduce gas usage by changing your driving habits.
  4. Establish a general savings plan. Put away a certain percentage of your earnings on a regular basis, perhaps via automatic deposit to your bank account.
  5. Build a CD ladder.  CD ladders combine the higher rates of CDs with some of the flexibility of savings accounts.
  6. Invest in short-term Certificates of Deposit (CD) at your financial institution.  Remember, interest rates will still be rising and you do not want to be caught holding long-term CDs while they do.
  7. Try a Money Market Account that offers higher interest.  Beware that some MMA’s have higher fees and/or minimum balance requirements, but do offer a higher return than savings and checking accounts.
  8. Check with your local credit union.  Unlike banks, they are member-owned (you) who work for the benefit of each other rather than bank shareholders.

The economy is going through change, but that doesn’t mean the nation is headed into prolonged dark times.  Keep your head and the inflation we see will begin to ease back.

Beg to differ? Agree to disagree? Your thoughtful submissions are welcome for consideration. Send to, subject line: The Soapbox.


About this Author

Gordon Simmons

Gordon Simmons has over four decades of experience in the financial industry. He served for 21-years as CEO of Service Credit Union. He specializes in international economic issues and finance. Gordon is now semi-retired, which means he’s now busier than he intended to be.