Hedging Inflation

Inflation is a big word with a mighty big stick. About now most everyone is feeling its smack. For the most part we're at the mercy of the government. In the broad scheme of things it's their fault due to lack of foresight and mismanagement. There's not much the little guy can do but wait for the fall out.

There were several instigators that were bound to increase inflation. Lock down (leading to goods not being produced), goods being stuck at ports, higher oil prices, higher unemployment (leading to employers offering more money to keep their employees), and that led to the consumer paying more. 

Then there was the government giving out incentive checks. Much as I liked the money, I didn't think it was a good idea. The premise was good, but there was no way to pick out the people who desperately needed the money from the ones who could get by. Lastly the 1.75 trillion dollar infrastructure bill signed into law.

I'm not opposed to better roads and internet, but I think it's something that needed to be put on the shelf until we dug ourselves out of this quagmire first. I worry about it because governments have a bad habit of printing money when it doesn't have the means to back it up. Look at Argentina and Greece as an example of what not to do.

So let's set aside what the government is going to do and focus on the everyday guy on the street. What can we do?

I've been noticing that every time I go grocery shopping I come home with less and less. This is normally the time of year when I overspend, building up my larder, buying gifts, buying pricier food for lavish meals. 

Not this year.

Rather than spend more, I've been spending less. Since I've done a good job of stocking my pantry and freezers, I don't really need anything. I might buy a few items that I normally wouldn't buy like heavy cream and turkey, but even with those items, I'm biding my time and checking prices.

My garden did poorly this year, but it was still enough to support us for fresh eating. We butchered a goat, several quail and a few chickens. The chickens are gone but I still have quail and goat in the freezer.

My advice is if you can go without something, do it. Spend your money on more durable goods (if you need them). For example, after more than 25 years, I need a new winter coat. Sadly, the coats I've seen so far are a little too trendy, geared more for teenagers wanting to look fashionable rather than for warmth. REI has the best quality coats but there's not one near us. My other option is to find one at estate sales. Oddly enough, you can find a lot of high quality clothing at estate sales.

If you have a lot of cash in the bank, put a hunk of it into an interest earning long term saving account. As inflation grows, your cash is worth less. 

If you need a loan, get it now. Invariably, when inflation gets crazy, the Fed raises interest rates. It hasn't yet, but if things get worse, they'll have no choice but to raise them.

If you're shopping for Christmas, don't shop for trendy crap. This one year, the kids can get books, art supplies, and clothing. Electronics will likely be more expensive since many of the microchips are imports. That includes tvs and computers.

Prep for winter (or summer if you're on the other side of the world). You don't want to get caught needing something important for the house or for you when prices keep soaring.

I've been through enough inflationary periods in the US to know that eventually it gets better, but for now we'll have to slog through this one.

Ironically, I didn't notice the terrible inflation period we lived through during the 70s. We were young and already poor so it was nothing new. I did notice the Great Recession of 2007-2009. It wiped out a big chunk of our savings, forcing us to wait on retirement and rebuild our nest egg. That took four long years.

It's always something.

In the end, all we can do is shop smarter and plan ahead. Stock your pantries, plant a garden, cook at home, shop second hand, and mend things rather than buy them new. All these little things add up. It'll help while the pinch is on.

For a longer explanation on this current inflation check out this article.

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Lynn said…
All very good points. We're offsetting a little of our market bill by growing some vegetables at home now. Next year we might try more of that and expand our little garden.

I'm disappointed by the drop in quality of new goods. I bought myself a new t-shirt online from Target as a reward, but when it arrived the cotton knit was so thin I knew it would disintegrate fast. Three months later it's shredding every time I wash it. I spent only five dollars, but if I'd bought vintage from a thrift store like I usually do it might have lasted for years. Lesson learned.
Maria Zannini said…
Lynn: I find myself buying t shirts at garage sales more and more often. They're heavier and better made. I've been so disappointed in the new clothes available now.

I dread buying anything new lately because manufacturers skimp on the raw materials.
Robin King Hunt said…
Hello dear old friend - emphasis on DEAR! I agree 100% on your blog today. What a world...what a world! Ironically I just assisated with a 2-day estate sale at my father-in-law's home, as he passed in September. Sad as it was, I enjoyed putting the odd and random items that were my in-laws with buyers who saw the items as treasures. I sell on FB Marketplace for friends and family and sales are up. I hope that more people buy American-made, second-hand and homemade items more so this year- it just makes sense. Fondest of wishes to you and Gregg. I hope all is well - Robin (your favorite sketch artist) Thanks for your blogs!
Maria Zannini said…
Robin! How wonderful to hear from you!

I think you hit the nail on the head with your estate sale experience. I know when I buy something it'll probably be with me the rest of my life or until I'm too old to use it, then it can be passed on to the next owner. I adore things that last.

My secret wish is that maybe we'll get tired of importing stuff and start buying more American made products. They'll be a bit more expensive, but if you plan to keep it, it's likely to last a lot longer than the imports.

Sending you a virtual hug, my friend.
Jenny Schwartz said…
Inflation is a scary beast. Hope we all have happy Christmases despite the news media trying to convince us we're going to hell in a handbasket.
Maria Zannini said…
Jenny: I can't remember the last time I read or listened to our news sources. It's more work, but I try to get my information from as many independent sources as possible. The media has cried wolf one too many times for me to believe them anymore.
Mike Keyton said…
I do think it’s seatbelt time. We’re in for a bumpy ride
Maria Zannini said…
Mike: I feel like you need to use a Jamaican accent when saying that. A la Harry Potter and the Prisoner of Azkaban movie. :)