Greg de la Cruz works in the tech industry and is the author of two published titles on Amazon.
We notice inflation in different ways. I for instance, am privileged enough to feel inconvenienced by rapidly rising prices when I see the portion sizes of my go-to snacks suddenly shrink. Others, on the other hand, face the more common situation of checking the price total at the supermarket checkout and seeing it balloon to never before seen levels.
And for those of you who were hardly getting by even before the compounding effects of supply chain issues, the war on Ukraine, China lockdowns, labor shortages, and petrol company price gouging brought the consumer price index to historic highs – I honestly don’t know how you’re able to deal with such a nightmare situation.
Andy Baxley, a certified financial planner based in Chicago likens this situation to “being out at sea in a tiny little boat in the midst of a horrible storm.” Similar to what everyone was saying about the Covid-19 lockdowns in early 2020, in the scary inflation environment we are witnessing, we’re all in the same boat so to speak.
Except that we aren’t.
Some boats are bigger than others, and others ride fancier boats whereas some may just be clinging to a life raft at this point.
Andy Baxley tells us that we “just have to control what [we] can control.” And he expounds, “You can’t control the storm or ocean, but you can control what you’re doing on your little boat.”
It’s a good analogy—I’ll give Baxley the credit that’s due him—but obviously, he was only looking at those who were above water. Some people, at this point, don’t even have boats to take them to shore. And many people—especially in developing countries—can only rely on their next paycheck to get them from islet to islet.
Because there’s no dry land, no shore in sight for many of us.
What can we do stay afloat during an inflation storm? Let’s examine these nine simple ways.
9 Ways to Stay Afloat During an Inflation Storm
These nine ways are divided into three categories or strategies – the first being to downsize or decrease spending, the second to increase income, and the last is to establish a long-term solution in dealing with inflation.
First Strategy: Decrease Spending
The most intuitive way to stay afloat during a period of high inflation is learning to be more efficient with costs whether it’s to reduce spend on luxuries, or biking to work instead of commuting. Here are three ways to decrease spending.
1. Buy Long Shelf-Life Essentials in Bulk
You’re never going to be able to remove essentials from your grocery list, because they’re called essentials for a reason. They’ll always find a way of appearing on your receipt.
- Removing rice from your diet, despite it being a staple in your culture? You’ll crave for it.
- Using laundry detergent to wash your plates, because dishwashing soap feels extra? You’ll notice the difference.
- Intentionally forgetting to buy toilet paper and sticking with water to clean your butt? Maybe this one’s negotiable. Maybe toilet paper deserves to be stricken out from the essentials list.
While it’s extremely difficult to cut spend on essentials to the point of feeling yourself trapped, the workaround is to buy long shelf-life essentials in bulk. This can include toothpaste and toiletries, cooking oil, canned food, grains, and even snacks. Who ever said that snacks were non-essential? I remember intentionally leaving off snacks on my grocery list once, and I immediately regretted it once I realized that I spent too much money eating coffee shop pastries (which cost way more).
Celebrity Shark Tank investor and Dallas Mavericks owner Mark Cuban, did a YouTube video about getting ahead on personal finances – and buying in bulk was one of his tips. His suggestion was to buy boatloads of toothpaste at one part of the year, especially after peak retail season. Not only will you stave off increasing prices for toothpaste, but you’ll essentially remove toothpaste from your grocery list for as long as your supplies last.
2. Negotiate Recurring Bills
Did you know that you could negotiate your recurring bills? Neither did I. But understand that not all regular bills are negotiable – most utility bills are non-negotiable, especially if there’s nothing irregular that can be pinpointed.
If you have a phone plan, you can negotiate that. From experience, I was able to negotiate or more like downgrade my phone plan which was 3 or 4 years old at the time. Not only was the carrier able to give me a lower monthly charge, but I was able to get slightly more perks than I had before. It happened that I was eligible for one of the promos, and they were also standardizing a certain service, especially with new subscribers.
There are other recurring bills you can negotiate, such as insurance payments. Speaking for Next Advisor, finance expert Andrea Woroch says that “revisiting your insurance coverage could also unlock sizable savings.” She called her homeowners insurance provider and ended up with “better coverage for less.” She was able to save more than $1,000 by simply talking to her provider.
3. Take Advantage of Free Stuff
The most underrated way to decrease spending is to take advantage of free stuff. Some of us unknowingly do this, some are aggressive in their approach, and there are those who just don’t know where to look.
To us who unknowingly do this, we spend the weekend at a public park or beach that doesn’t require entrance or rental fees, instead of going somewhere like a mall or a coffee shop where the atmosphere could easily suck out our money.
To us who are aggressive in searching out free stuff, we might take an empty gallon to work and secretly take too much drinking water than we should. Or we go to a supermarket one hungry afternoon and scope out aisles that give free taste samples. But seriously, one way to “aggressively” take advantage of free stuff is to know where they exist, and in which transactions.
And to us who don’t know where to look, now is the time to learn. Evaluate how you spend your money when you’re out. Is there a place where you can find free drinking water instead of buying overpriced bottles at restaurants and shops? What coupons are ideal for your spending habits? It’s best to learn from others, whether it’s asking around or looking online.
Second Strategy: Increase Income
This strategy isn’t very popular with many traditional parents, especially in the Asian region, because from here we’ve always been taught to be thrift in times of economic crisis. But we live in a different world now – and because the labor landscape has changed so much from a generation ago, the strategy to increase income has become more viable. Also – you can do any of these below, while also doing any of the ways listed in the first strategy.
1. Ask for a Raise… Or Leave
First and foremost, know your worth. Fortunately for you, you live in a worker empowerment era, where the backlash of union-busting in the past couple of decades has caused workers to unionize in a drastically different way. And that’s through a unity in the belief that you can find an employer that pays you what you’re truly worth, or for much more.
If you haven’t gotten a significant raise in the past year or so (or worse, for several years now) then you should consider yourself as having lost money. The definition of “significant raise” for our purpose will be a salary increase percentage that’s above and beyond the inflation rate for a specific year. And if you haven’t had any of those for a while now – it’s time to either ask for a raise, or leave.
You might be afraid to ask for a raise for a bunch of flimsy reasons like “there’s an incoming recession and I don’t want to burden my employer” or “I’m not good enough” or “I’m scared my boss will get upset.” Especially the last reason – being fearful to upset your superior – these are terrible reasons not to ask for a raise.
For one, the longer you stay in your company means that it’s saving on recruitment costs that it could spend when your position is theirs to fill (they even pay headhunters an amount equal to one month of your salary). Second, you’re good enough to have done the job for a while now. You will have gained skills that other organizations value more than your existing employer does, as it could be vastly undervaluing your toolkit. And lastly, getting them upset is either worth it or it’s not going to happen at all because you coming forward to them is something they’ve been expecting for a while now. There you have it – either ask for a raise, or leave.
2. Leverage Skills to Turn into a Side Hustle
An alternative to either switching jobs or getting a big pay hike is turning to side hustles. You may already have existing skills that you can leverage into a side business or freelance work. The more you define yourself, or encapsulate yourself around what your so-called “full-time job”, the more you’re unable to find a separate identity of yourself that has some earning potential. Looking for a side hustle will not only potentially increase your income, but it will also broaden your perspective about yourself.
I know people who, by their rank in the company and the number of years they’ve stayed, are obviously earning so much dough. But what’s another common theme I see with them? They have part-time jobs that offer modularity in personal time investment.
One example is a high-ranking manager I know who teaches part-time in a local university. School isn’t year-round so you get time off, plus it’s usually not a daily schedule. Not to mention that you can sharpen your skills in teaching and public speaking.
Another example is to do online work that isn’t time consuming. Having dabbled in online work myself for many years now, I’m able to draw the line between what’s work that consumes time versus work that you can invest time in as you please. Make very careful distinctions about online work, because it could compromise your existing job in a way that just might not be worth it.
3. Rent Stuff Out or Sell
As inflation in my locality got worse and worse, I’ve noticed acquaintances rent stuff out. Whether it’s extra space they have in their house, their vehicles, even memberships – there are many things you can rent out these days because there are many platforms where you can do so.
Selling stuff is the more common choice. Facebook Marketplace provides an avenue for both beginner and expert sellers to put their product out without any overhead. It’s the platform where many long-time online sellers started out before going “legit” or owning a website or page at an e-commerce site.
Third Strategy: Establish a Long-Term Solution
This last strategy is perhaps the most important, yet most underutilized. One issue is access – not many people have the minimum required funds to start an investment. And another issue is lack of education – many people, especially in my country, have been scammed by Ponzi schemes and pump-and-dumps that there’s this natural resistance to legitimate investment options.
1. Park Some Savings into an Investment
Ordinary savings accounts earn interest income that’s never enough to stave off inflation, even in a normal year. How much more during a year of extraordinarily high inflation? Money parked in ordinary savings will essentially lose so much value in short time.
There are many low-risk options that we may not even be aware of. The current trend is to invest in I Bonds, and Samuel Deane who is the founder of Deane Wealth Management suggests that if you are “one to five years from wanting to buy a home, [he] think[s] that investing in I bonds can be a pretty good alternative.” The interest rate for I-Bonds shifts along with inflation and currently sits at an annual rate of 9.62% as of May 19, 2022.
If you don’t have the time to manage your investment accounts, commercial banks offer investment management services where you put money in an investment account and a fund manager does the work for you, for a fee.
2. Purchase Stocks or Bonds
During a downturn, stocks are usually cheap because the market has lost value – so it’s prime time to buy company stock. Just make sure you’ve informed yourself well enough to buy a certain stock. Remember when the barrel of oil dropped below zero in 2020? That was the best time to buy energy stocks, especially with how demand has shot up to astronomical levels today.
Bonds are an alternative, but they usually entail more upfront cost. You can purchase bonds from a broker, through an exchange-traded fund, or even directly from the government.
3. Invest More in Yourself
Most importantly, invest in yourself. More learning, more networking, more self-marketing.
E-learning has never been more accessible and inexpensive than it is today – just make sure you don’t get sucked in by fake gurus. You can now acquire new skills more easily and improve on existing ones.
Likewise, take advantage of events or calls where you can expand your network. Building a list of contacts can get you opportunities to both decrease spending and increase your income. That’s why this is a good long-term solution, because the more you cultivate your weak ties, the better your chances are of getting the things you either want or need.
As for self-marketing, you’re lucky enough to be living in a time where people can establish a personal brand with no cost and little effort, because it has been democratized by a variety of social media on professional networking platforms – Instagram, YouTube, LinkedIn, Patreon, etc.
Staying Optimistic Despite a Horrendous Outlook
The truth of the matter is – things could get worse than they already are now. The good news is, this isn’t the first time we’ve ever experienced an inflation storm. Yes, there may have been periods in history where there was very high inflation, even hyperinflation – and sadly, some governments broke down. But the key thing to note is that high inflation is simply a symptom of change.
Change is constant, and there’s simply a shift in the way products and services are valued in society today. Economic theories aside, the market always finds a way to eventually balance itself. And while many people will suffer in the process, a brighter future is still worth looking forward to, where hopefully people finally know the right things to value as opposed to things they’re manipulated in valuing.
I’m getting a little philosophical here, so how about if I just ended this piece.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2022 Greg de la Cruz