Money hacks to protect against inflation

There’s an elephant in the room, or at least, in the economy: inflation. Inflation is blowing up in the headlines, causing many Americans to feel a little deflated about their money. So, let’s talk about what inflation is and what you can do about it.

Inflation is simply an increase in prices. Fifty years ago, we saw some crazy inflation rates of around 10%-12%. This past year, inflation rates clocked in at 7%. That’s not in the 10%-12% range, but it’s a heck of a lot higher than the 1.4% rate the previous year — five times higher if you’re doing the math at home.

Inflation and your personal finances

Dave Ramsey explains that inflation in the 1970s was caused by monetary policies, and the Fed (Federal Reserve) shrinking and growing the money supply. Today’s inflation, however, is for a completely different reason. It’s the tsunami surge that followed the global pandemic of 2020. Shutting down production created a shortage of almost every kind of good and service worldwide, and that drove up the prices. It’s basic supply and demand.

The good news is this type of inflation won’t last for a long time. Why? Factories will catch up on production, and we’ll have more to buy. On top of that, people have slowed down on their purchases due to prices being so high. Those factors should allow everything to even out sooner rather than later.

Don’t let fear control you

So, what can you do about it? For starters, stop freaking out and start controlling the controllables. The biggest thing you can control is where your money is going. Enter: budgeting.

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