Sep 15, 2022

Inflation: What to do?

You wake up in 2022 and hear the news that inflation is the worst you’ve seen in your lifetime. Perhaps you were born in the 1960s or 1970s and the only thing you remember about our last period of high inflation is your parents waiting in a long line for gasoline to fill their cars. Maybe you recall the 1970s like they were yesterday, and your wages never caught up to the rampant hyperinflation early in your career. You may be scared that this will last a full decade – despite the economic situation being quite different today.

What are you to do? Most articles that pop up when you Google “how to deal with inflation in 2022” have the same answers. Spend less at the grocery store, eliminate unnecessary expenses, drive less, or magically go increase your income! Articles that provide tips on where to invest are equally unhelpful. Some articles tell the reader to invest in CDs, bonds, TIPS, stocks, real estate, REITs, gold, commodities, cryptocurrency, and fine art all in the same article

This blog aims to mix some smart money topics into a list of “things to do” when everything costs so much. It’s not meant to be specific advice that applies to everyone, but it is meant to be actionable items and address things you can control. So we will not be recommending that you stop driving your car to save gas or asking your boss for a raise!

  1. Do a home energy audit. Simple things like LED lighting, hot water heater adjustments, or upgrading appliances may save you as much as 25% in utility costs. The first 14 items on this list can be done on your own, and the last item may be free through your utility company.
  2. Use your airline mileage now while flight costs are extremely high. Transportation and airfare costs are inflating as high as 35% year over year – which means your banked airline mileage is an investment that has grown!
  3. Travel abroad while the US dollar is strong. With high inflation and rising interest rates, the US dollar has strengthened versus many other currencies. If you can get past the flight cost or have banked airline mileage, your dollar will go a long way once you get to these destinations.
  4. Consider an electric vehicle for your next car purchase. With the recent Inflation Reduction Act passing, the $7,500 tax credit was extended, and many states also have tax incentives. Restrictions do apply, such as income caps and vehicle makes and models. This government website is a great resource, but we can also assist in the nuances and financial planning around your purchase.
  5. Do online research for big purchases. Especially early on in the supply chain difficulties, many big ticket items like appliances and furniture saw price spikes higher than the overall inflation rate. There are websites like capitaloneshopping.com that help scour the web for deals at major retailers. It’s very similar to Kayak.com for travel.
  6. Cook a new recipe with only ingredients you have in your home. Americans waste 30-40% of the food they buy – it can be fun to track to ensure you fall below this statistic and it will also save money on inflating food costs.
  7. Read a book or listen to an audiobook. Applications like Libby or Overdrive.com can hook you into your local public library and you can check books out for free.
  8. Be very skeptical of the financial media. How does this relate to inflation or improving your finances? Acting on information you learn from pundits on television that don’t know your situation can be more harmful than any other financial decision you make. As Dr. Daniel Crosby recommends in this article: evaluate the source, question the melodrama, examine the tone, consider motive, and check the facts!

What do you think? We’d love to hear your ideas too. Reach out to us by filling out the form on our website or contact an FPF advisor to share your feedback.


Photo by Ryan Oldroyd