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1. Increase your earning power

Female Tutor Teaching Class Of Mature Students
Monkey Business Images / Shutterstock

When inflation occurs, you can think of it in two basic ways: one is that prices are increasing; another is that the U.S. dollar is losing value. Either way you look at it, earning more money is a pretty safe solution.

If you’re currently out of work or are having to deal with reduced hours, consider using whatever extra time you have at your disposal to develop your skill set and position yourself for a bigger paycheck.

You can use those skills to start a freelance side hustle or check out the latest job postings if you think it’s time for a job change with a larger salary and more opportunities to advance.

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2. Play the stock market

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Gorodenkoff / Shutterstock

Stocks have historically outperformed inflation to a significant degree, making them one of the strongest hedges against it.

You can use inflation to your advantage by investing in sectors of the economy that may benefit from rising prices, like food, tech, building materials or energy. Publicly-traded corporations like consumer product giant Procter & Gamble, burger chain Shake Shack and medical supply manufacturer McKesson have all either raised prices or are planning increases for later this year.

There are a number of innovative apps that can help you invest in the market. Weigh the pros and cons of each one, find the right one for your financial needs and get in the game.

3. Get precious

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RHJPhtotoandilustration / Shutterstock

Fears of inflation have always been good to hard assets like gold and silver. Both commodities have performed well over the past five years, with the value of gold rising by 44% over that span and silver’s increasing by an even healthier 54%.

You can hold precious metals directly by purchasing coins or bars, or you can take a more hands-off approach and invest in ETFs that hold actual gold and silver. There’s a very popular app that can help you do that.

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4. Capitalize on the scorching real estate market

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Gabriele Maltinti / Shutterstock

Real estate has proven to be one of the most reliable long-term investment plays you can make.

The U.S. housing market has been on a serious upward trajectory since about the fourth quarter of 2011, when the median sale price was just over $221,000. At the end of Q1 2021, it had risen to $347,500.

If you’ve got the funds available for a home purchase, start comparing mortgage rates today and score yourself the best rate possible. The lowest mortgage rates tend to go to the borrowers with the highest credit scores, so do what you can to bring it up a few notches.

If buying a home is out of your budget, you can invest in real estate without buying property of your own by putting your money into a real estate investment trust, or REIT.

5. Adjustable rates are not your friend

A conceptual look at variable interest rates. Where next?
travellight / Shutterstock

When inflation rises, so do interest rates. If you’re carrying any adjustable rate debt, like a credit card balance or home equity line of credit, an uptick in inflation will result in higher interest charges.

That is especially true for mortgages, too. If you have an adjustable rate mortgage, you may want to talk to your lender about refinancing and opting for a fixed rate instead. That’ll guarantee that you’ll pay the same interest rate until you decide to sell your home — or refinance it again at an even lower rate.

6. Bring down your debt

Business men sitting stressed out with home expenses and monthly credit card debt.
shisu_ka / Shutterstock

If you’re carrying a significant amount of debt, but a mortgage refi or rate swap aren’t suitable for you, there are still options available for reducing the amount of interest you’re paying your creditors.

One proven method for slashing the cost of your debt is to take out a lower-interest debt consolidation loan. By rolling all of your high-interest debt into a single loan it’ll be much easier to budget around a single payment to one lender rather than several.

7. Cut all the remaining costs you can

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Casper1774 Studio / Shutterstock

You probably noticed by now that most of the suggestions here involve spending money. But cutting back on expenses is also an excellent hedge against rising inflation.

You may be paying more than you need to for your insurance products, so do some comparison shopping. You may find a better deal on your car insurance or save hundreds of dollars by comparing rates on homeowners insurance.

And don’t turn up your nose at coupon clipping, even Buffett does it.

8. Stay the course

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Syda Productions / Shutterstock

Not everyone believes inflation’s recent spike is a sign of things to come.

Buffett himself said that inflation doesn’t appear to be preventing many Americans from spending.

"People have money in their pocket and they pay the higher prices,” he told his Berkshire Hathaway devotees at the May 1 meeting.

So if you’re comfortable enough with your current finances to absorb the higher prices — and maybe even have some “spare change” kicking around to invest with — you may want to ignore the hype and keep doing what you’re doing.


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Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.