How I Fight Inflation

There has been lots of talk lately about inflation -- some of it good, some of it not so good. Some of the articles I have read advocate investing in foreign markets where inflation is not such a problem, putting money into commodities, or looking for certain inflation protected sectors in which to invest. I find that this advice may be great for investment and stock brokers or for those with money to throw around, but for the everyday person just looking to save a couple bucks on their grocery bill, this kind of advice really doesn't do much good.

Personally, I don't find inflation such a bad thing. There can actually be many positives associated with inflation. However, part of reaping the positives of inflation and avoiding the negatives comes with knowing how to combat the effects of inflation against your wallet in your everyday purchases.

While in most cases we've yet to see any type of real inflation take off just yet (other than gasoline), here are some of the ways in which I plan to combat inflation when it comes to how it affects my money and my purchase power.

Knowing My Stores

If you regularly visit more than a couple grocery stores or retailers, you've probably noticed that particular stores have various strengths and weaknesses in where their deals lie. Knowing when and where to find the best deals helps me combat the affects of inflation. There is one store in particular where I can find the best deals on almost any food item, while I can hit spots such as the area Dollar Store to pick up things like certain toiletries, cleaning supplies, office supplies, and similar items, and visit resale shops for most clothing purchases. Stocking up when I find deals on certain items that I know I will use and that have a decent shelf life also helps me avoid having to purchase these things when they are priced higher.

Renew, Reuse & Recycle

No, this section isn't about going green, although it won't hurt your efforts if you're trying to do so. But being able to renew, reuse and recycle certain items can eliminate the need to buy them new when the prices could be significantly inflated from the price you initially paid for them.

Remember in the old days when people actually used to mend clothing? I still do. Incredible isn't it? From socks to shirts and pants, not only do I still mend torn and tattered clothing, but my wife doesn't do it for me. Given, my mends aren't always the most attractive, and typically I use the clothing as just around the house wear or for outdoor work, but I think this is a prime example of being able to renew old items. Then when I'm done with the clothing or it can no longer be mended, I often turn it into rags for cleaning or whatever.

This is just one example. You'd be surprised just how many items you might be considering getting rid that have another life in them, possibly as something completely different from what they started out as. With a little elbow grease or repair work their lives could be extended significantly. And if you aren't the person to do it, maybe the person who is would be willing to pay money for such an item at a garage sale. This is what I do with many of the items I no longer need, providing someone else with the opportunity to save money and making a little cash in the process. If the items don't sell, I typically send them off to charitable organization for the tax write-off.

Inflation Protected Bonds

If you're looking for an investment tip that's quick, easy, doesn't involve fees or commissions, in some cases is even free from federal taxes, and that helps you combat inflation, look no further. Series I government savings bonds might be what you've been searching for. They aren't hard to buy (available for purchase at most banks), you don't have to go through a broker, have a low initial buy-in (starting at $50 for paper bonds), and once purchased, really don't require any work or watching and continue to earn interest for 30 years.

I like I series bonds since they are safe, provide protection against inflation, I have control over them (unlike stocks, mutual funds, real estate), and are available to the everyday investor such as myself. While they don't earn me huge returns, especially when inflation is low, I won't lose money, and if inflation hits when the economy starts picking back up, I look forward to the returns on my I bonds increasing as well helping to better balance the effects of inflation.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is at the reader's discretion.