Inflation is a decrease in the purchasing power of money. The costs of goods and services go up, while the value of money stays the same. Translation: we’re paying more for less! Gas, groceries, eating out, entertainment-prices rising in every category. The inflation rate is the percentage calculated for this increase in costs.

Some experts believe inflation is here to stay and if they are correct, we run the risk of what’s called hyperinflation which is inflation that spirals out of control. Essentially the value of money declines so rapidly that you literally can’t keep up with it.

To hedge against inflation I recommend you consider additional income streams. Taking on another job or bringing on multiple income streams can help you continue to be generous, create a margin in your budget, and allow you surplus to invest. It enables you to reduce your risk and puts you in a stronger financial position during an uncertain economy.

Be sure you have financial margin. Why is margin important? When you spend 100% of your income, it’s like walking to the edge of a cliff. During a time of inflation, the increase in costs for your necessities will put you over the edge! Giving yourself margin in your budget allows you to take a few steps away from the edge, closer to safety. To gain margin, you will need to reduce your expenses. This can be difficult for some. I recommend:
get competitive bids on your recurring bills
find apps that can help you get cash back on day to day purchases (I use Fetch Rewards-email me at budgetwithcarla@gmail.com if you’d like a code and link to get started with extra points)

If you have have enough margin, consider investing in the assets that appreciate during the inflationary times. I would also strongly recommend that you make giving a high financial priority. It’s tempting to tighten your budget and reduce giving when costs are increasing, but giving is still important, maybe now more than ever. Many charities and organizations that you give to are not able to adjust their goods and service pricing to account for inflation-it would impact their ministry. And yet, their costs are rising, and their staff needs help too. Could you increase your giving to help them cover their costs?

A few things to ask yourself…

What is one way I can increase my income? Is there a side job I’m interested in trying to help offset expenses?
Where are three areas in my budget I can trim expenses?
What is one app I can look into to help me save money?
Where can I create more margin in my budget so that I have more funds for investing?
What tweaks need to be made to shift funds toward inflation proof industries?
What’s one organization that I can support that may be suffering more due to the rates of inflation?
How can I challenge myself to be more generous during this season?