Beating Inflation: How Families Can Protect Their Money

In our previous article, Rigged: How Inflation Quietly Steals Your Wealth and Why You Can’t Get Ahead, we revealed how inflation erodes your purchasing power, making it harder for you and your family to achieve financial stability. Now, we shift from understanding the problem to practical solutions—real steps you can take today to protect your finances, build wealth, and safeguard your future against inflation.

Understand Your Financial Picture

The first step in fighting inflation is understanding your financial position. Budgeting might sound basic, but it’s your strongest defense. Creating a budget allows you to clearly see how much money is coming in, where it’s going, and how you might be able to adjust spending and savings habits to cope with rising costs.

Here’s how to start:

Step 1: Gather Your Financial Information
Begin by collecting all relevant documents: recent pay stubs, bank statements, bills (utilities, rent or mortgage, groceries, transportation), credit card statements, and any other regular expenses. Having a complete picture is crucial to accurately track where your money goes.

Step 2: Track Your Spending
Write down or use budgeting tools and apps like Mint ¹ to log every expense for at least one full month. Categorize each expense clearly—housing, food, transportation, entertainment, savings, and miscellaneous. Doing this helps identify spending habits and areas where costs might be reduced.

Step 3: Analyze Your Spending Patterns
After tracking expenses, review your monthly spending carefully. Notice any surprises or areas where you spend more than you realized. Common areas of overspending include dining out, subscription services, or impulse purchases.

Step 4: Set Realistic Goals
Set financial goals based on your analysis. Your goals should be achievable and clearly defined—for instance, reducing spending on entertainment by 20% or increasing savings by a specific amount each month. Setting manageable goals makes success more likely and helps motivate continued budgeting.

Step 5: Create Your Budget Plan
Using your income and expenses, create a detailed budget:

• First, list essential fixed expenses (rent, utilities, loan payments).
• Next, account for variable but essential expenses (food, transportation).
• Finally, allocate funds for discretionary spending (entertainment, dining out) and savings or investments.

Consider following popular budget frameworks like the 50/30/20 rule:

• 50% essentials (housing, utilities, groceries)
• 30% discretionary spending (entertainment, dining out)
• 20% savings and investments

Adjust these percentages according to your specific circumstances and goals.

Step 6: Review and Adjust Regularly
Budgeting isn’t a one-time task. Regularly (monthly or quarterly) review your budget to reflect changing costs, income, and goals. This helps maintain control over your financial situation and quickly respond to inflation-driven price changes.

Using these steps, you can gain clarity on your financial situation, empowering you to make informed choices that protect your purchasing power and prepare for long-term financial success.

Building Your Inflation Defense: Saving Wisely

Traditional savings accounts rarely keep pace with inflation, especially with interest rates far below inflation rates. Smarter saving strategies are essential to protecting your purchasing power:

High-Yield Savings Accounts

High-yield savings accounts offer significantly higher interest rates compared to traditional savings accounts. While still not always matching inflation, these accounts minimize the erosion of your money’s value. For instance, banks like Ally (https://www.ally.com/) ² or Marcus by Goldman Sachs typically provide interest rates several times higher than the national average.

When choosing a high-yield savings account:

• Compare interest rates regularly to find the best deals.
• Ensure the bank or credit union is FDIC-insured for added safety.
• Avoid accounts with fees or restrictive withdrawal terms.

Certificates of Deposit (CDs)

Certificates of Deposit are another secure way to preserve your savings against inflation. CDs pay a fixed interest rate over a set period, typically ranging from 6 months to several years. They generally offer higher returns than savings accounts, especially in shorter durations.

How CDs can help:

• Lock in higher interest rates with short-term CDs during periods of rising inflation.
• Ladder your CDs (purchase CDs at varying terms) to maintain flexibility, allowing you to access funds at intervals without significant penalties.
• Always compare rates between multiple banks and credit unions to find the best terms available.

Money Market Accounts

Money Market Accounts (MMAs) are another safe option, combining the benefits of savings and checking accounts. They usually offer higher interest rates than regular savings accounts and come with check-writing privileges. MMAs provided by credit unions often have particularly competitive rates, making them suitable for growing your savings safely.

Tips for Maximizing Your Savings:

• Regularly review and compare rates offered by various banks and credit unions.
• Avoid monthly fees, which can quickly erode your savings growth.
• Automate savings deposits to ensure consistency.

Treasury Inflation-Protected Securities (TIPS)

TIPS are U.S. government bonds specifically designed to protect against inflation. They adjust their principal value based on inflation rates measured by the Consumer Price Index (CPI), thus ensuring your savings maintain purchasing power. TIPS can be purchased directly from the U.S. Treasury at TreasuryDirect.gov (https://www.treasurydirect.gov/) ³.

By utilizing these financial tools strategically, you can significantly reduce inflation’s impact and begin to build meaningful financial security for you and your family.

Bitcoin as an Inflation Hedge

One of the strongest defenses against inflation is investing in Bitcoin—not cryptocurrencies generally, but specifically Bitcoin. Unlike fiat currencies such as the U.S. dollar, Bitcoin has a fixed and limited supply of 21 million coins, meaning no government or central bank can create more of it arbitrarily. This inherent scarcity makes Bitcoin uniquely valuable as an inflation-resistant asset.

Why Bitcoin?

Bitcoin was specifically designed as a response to inflationary practices, such as uncontrolled money printing by governments and central banks. Unlike traditional fiat currencies (like the U.S. dollar), Bitcoin’s fixed supply helps ensure its value isn’t diluted over time. Historically, Bitcoin has demonstrated strong appreciation over extended periods, despite short-term fluctuations, making it an effective long-term hedge against the gradual erosion of purchasing power.

For example, while the purchasing power of the U.S. dollar has consistently declined over the last decade, Bitcoin’s purchasing power has substantially increased despite short-term volatility. Many financial experts now view Bitcoin as digital gold—an asset you hold primarily to preserve your wealth, especially during uncertain economic times.

Practical Steps to Invest in Bitcoin

Getting started with Bitcoin can seem overwhelming, but it’s actually straightforward—even if you have limited experience or funds. Here’s a simple guide to begin your journey safely and effectively:

Step 1: Choosing a Platform

Select a beginner-friendly platform that makes buying Bitcoin simple:

• Cash App: Ideal for beginners due to its simplicity and user-friendly interface. It allows easy purchase and sale of Bitcoin directly from your phone. Learn more at Cash App ⁴.
• Coinbase: Another beginner-friendly exchange, offering educational resources to help you learn as you invest. Check it out at Coinbase ⁵.

Safely Storing Your Bitcoin

Once you buy Bitcoin, you must store it safely to protect your investment:

• Software Wallets: Free and accessible apps like Trust Wallet ⁶ or Exodus ⁷ let you securely store your Bitcoin on your smartphone or desktop.
• Hardware Wallets: Devices like Ledger or Trezor offer even greater security by storing your Bitcoin offline. A hardware wallet, like Ledger ⁸, keeps your Bitcoin completely secure from hackers or exchange failures.

Investing Strategy: Dollar-Cost Averaging

Given Bitcoin’s volatility, it’s wise to adopt a strategy called Dollar-Cost Averaging (DCA). DCA involves regularly investing small, fixed amounts over time rather than making a single large purchase. For instance, investing just $10–$20 weekly can smooth out price fluctuations and reduce risk. Over time, regular investments add up, building significant wealth without the stress of trying to perfectly time the market.

Bitcoin Education and Community

Education is vital when investing in Bitcoin. There are numerous high-quality resources available online:

• Bitcoin.org: This official resource offers excellent beginner guides, detailed explanations, and frequently asked questions to understand how Bitcoin works and why it matters. Bitcoin.org ⁹
• “The Bitcoin Standard” by Saifedean Ammous: This book clearly and compellingly explains Bitcoin’s role as digital gold and how it provides a hedge against inflation. The Bitcoin Standard ¹⁰

Long-Term Thinking

The real power of Bitcoin as an inflation hedge is revealed through long-term holding. While short-term price swings can seem intimidating, historical data demonstrates Bitcoin’s ability to preserve and grow purchasing power significantly over multi-year periods.

By strategically investing in Bitcoin, you and your family can secure a critical hedge against inflation, ensuring your savings hold—and even increase—their value in the future.

Practical Budgeting Strategies

Effectively managing your money through budgeting is key to protecting yourself and your family against inflation. Here are practical and proven strategies to help you budget wisely, stretch every dollar, and build financial security:

Cut Unnecessary Expenses

The fastest way to increase your financial strength is by eliminating or reducing unnecessary spending. Even small adjustments can significantly impact your monthly savings:

• Cancel unused subscriptions: Review your monthly bills for streaming services, gym memberships, magazines, or other subscriptions you no longer use or need.
• Reduce dining out: Preparing meals at home more frequently can drastically cut food expenses. Planning meals ahead and buying groceries in bulk can amplify your savings even further.
• Shop smart: Utilize bulk purchasing for non-perishable items and household essentials. Combining bulk buying with coupons or using cashback apps like Rakuten (https://www.rakuten.com/) ¹¹ can stretch your dollar further.
• Evaluate utility expenses: Lower your utility bills by adopting energy-saving practices—turn off lights and appliances when not in use, switch to energy-efficient bulbs, adjust your thermostat, and regularly check for leaks or insulation issues.

The 50/30/20 Budgeting Rule

A straightforward, effective budgeting framework is the 50/30/20 rule, helping you balance spending and saving clearly:

• 50% for Essentials: Allocate half your income for necessities—rent or mortgage payments, utilities, groceries, healthcare, transportation, and essential bills.
• 30% for Discretionary Spending: Set aside up to 30% of your budget for non-essential expenses—dining out, entertainment, shopping for clothes, vacations, and hobbies. This allows flexibility and enjoyment while maintaining control.
• 20% for Savings and Investments: Consistently dedicate at least 20% of your income to savings, debt repayment, and investments. This crucial step ensures your financial growth, stability, and preparedness against inflation.

Creating and Using a Personal Budget Plan

Step 1: List Your Income
Write down your total monthly take-home pay, including wages, side jobs, or consistent financial support you receive.

Step 2: List Your Expenses
Categorize your monthly expenses clearly:

• Fixed expenses: housing payments, car payments, insurance premiums.
• Variable essential expenses: groceries, transportation, medical costs.
• Non-essential expenses: dining out, entertainment, clothing.

Step 3: Calculate and Adjust
Subtract your expenses from your income. If expenses exceed income, identify areas to cut back immediately. If you have surplus funds, allocate more toward savings and investments.

Step 4: Monitor and Adjust Regularly
Regularly review your budget monthly or quarterly to adjust for inflation, income changes, and new expenses. Use budgeting apps or financial tools like Mint (https://mint.intuit.com/) ¹² to simplify this tracking.

Automate Your Savings

To ensure consistent growth of your savings, automate your savings deposits directly from your paycheck into high-yield accounts or investment vehicles. Automating removes temptation and creates strong financial habits effortlessly.

By using these practical budgeting strategies, you actively protect your family’s financial health against inflation and create lasting economic resilience.

Financial Guidance for Returning Citizens

Re-entering society and regaining financial stability after incarceration can present unique challenges, but with focused effort and strategic planning, success is achievable. Here’s detailed guidance to help returning citizens manage finances effectively, build credit, and secure lasting financial independence:

Building Your Credit from Scratch

Establishing good credit is vital for securing housing, employment, and financial services. Follow these practical steps to rebuild your credit:

• Obtain Your Credit Report: Start by reviewing your credit report through a reliable source such as AnnualCreditReport.com (https://www.annualcreditreport.com/) ¹³. Regularly check for errors and report any inaccuracies promptly to credit bureaus.
• Secured Credit Cards: These are specifically designed to help individuals rebuild credit. You deposit a certain amount of money as collateral, which serves as your credit limit. Use your secured credit card responsibly by keeping your balance low and paying on time each month. Chime (https://www.chime.com/) ¹⁴ offers user-friendly secured credit cards tailored for credit rebuilding.
• Become an Authorized User: Ask a trusted family member or friend to add you as an authorized user on their credit card account. Their responsible usage can positively impact your credit score.

Managing and Reducing Debt

Effectively managing existing debts can significantly improve your credit and overall financial health:

• Prioritize Debt Payments: Focus on paying off high-interest debts first to minimize overall costs. Consistent payments, even small amounts, can substantially improve your credit score over time.
• Negotiate with Creditors: Don’t hesitate to contact creditors to discuss repayment plans or reduced interest rates. Many creditors will work with you to establish affordable monthly payments.
• Avoid High-Interest Loans: Stay clear of payday loans and rent-to-own agreements, as these can trap you in cycles of debt. Instead, explore low-interest loans offered through community credit unions.

Setting Financial Goals

Having clear financial goals keeps you motivated and focused:

• Short-term goals: Saving an emergency fund, paying off a specific debt, or building credit.
• Long-term goals: Homeownership, saving for education or retirement, or starting a small business.

Clearly define your goals, create actionable plans, and regularly monitor your progress.

Utilizing Community Resources

Numerous community organizations and programs assist returning citizens in financial literacy and economic stability:

• Financial Literacy Workshops: Many local organizations and nonprofits offer free workshops focused on budgeting, credit building, and basic financial literacy.
• Employment Assistance Programs: Programs specifically tailored for returning citizens can help you gain steady employment, which is critical for financial stability. Explore local community centers and government programs dedicated to re-entry assistance.
• Vocational and Educational Training: Enhance your earning potential by acquiring vocational skills or additional education through community colleges, trade schools, or online learning platforms like Coursera (https://www.coursera.org/) ¹⁵ and edX (https://www.edx.org/) ¹⁶.

Practical Tips for Daily Financial Management

• Open a Bank Account: Establish a checking and savings account with a reputable local bank or credit union. This ensures secure management of your funds and builds credibility with financial institutions.
• Keep Accurate Financial Records: Regularly track your expenses and income using budgeting tools or simple spreadsheets to stay organized and informed.
• Stay Informed and Educated: Regularly engage with financial literacy materials, online courses, and community education programs to continually improve your financial management skills.

By following these practical guidelines, returning citizens can navigate financial challenges effectively, build strong credit, and establish a foundation for lasting financial stability and independence.

Investing in Your Future: Skills and Education

Building inflation-resistant wealth requires growing your earning potential. Investing in your skills and education is crucial for obtaining steady employment and achieving higher wages, which ultimately protects you and your family against inflation. Here’s how to strategically invest in yourself to secure a brighter financial future:

Identifying High-Demand Skills

The first step in enhancing your earning potential is identifying and acquiring skills that employers need most. Focus on high-demand skills that offer stable, well-paying career opportunities:

• Information Technology (IT): Careers in IT, such as cybersecurity, network administration, or software development, are growing rapidly. These roles often offer competitive salaries, even at entry levels.
• Healthcare: Positions such as medical technicians, nurses, or certified nurse assistants are always in high demand, providing stable income and opportunities for advancement.
• Skilled Trades: Careers in plumbing, electrical work, HVAC repair, carpentry, or welding remain in strong demand, offering excellent earning potential and job security.
• Digital Marketing: Skills like social media management, search engine optimization (SEO), and online advertising are highly sought-after in many industries.

Accessing Affordable Education and Training

Quality education doesn’t have to be expensive. Here are accessible resources to help you acquire valuable skills affordably:

• Free Online Learning Platforms: Platforms like Coursera (https://www.coursera.org/) ¹⁷ and edX (https://www.edx.org/) ¹⁸ offer free or affordable courses from top universities and institutions in various fields, often including certification upon completion.
• Community and Technical Colleges: Local community colleges provide affordable vocational training and associate degrees. Many also have specialized programs tailored specifically for returning citizens, which include financial assistance and support services.
• Vocational and Technical Schools: These institutions specialize in teaching practical job-related skills, often in less than two years. They offer programs in automotive repair, HVAC, welding, and more.

Practical Steps to Get Started

• Assess Your Interests and Strengths: Choose a career path aligned with your natural abilities and interests. This increases your likelihood of long-term success and job satisfaction.
• Research and Planning: Conduct research on local job markets to understand which skills and certifications employers value most. Look at job postings to see which qualifications are frequently required.
• Enroll in a Course: Choose a course or certification that fits your goals. Online courses allow flexibility, enabling you to learn at your own pace.
• Network and Gain Experience: Participate in internships, apprenticeships, or volunteer opportunities to gain real-world experience. Networking with professionals in your chosen field can also significantly boost your employment prospects.

Leveraging Community Support and Programs

Many local organizations offer valuable resources specifically to assist returning citizens:

• Job Placement Programs: Local community centers or workforce development agencies often have programs designed to connect returning citizens with employment opportunities.
• Mentorship and Support Groups: Connecting with mentors or joining support groups can provide valuable insights, encouragement, and guidance from individuals who have navigated similar paths successfully.
• Financial Aid and Scholarships: Investigate scholarships and grants specifically designated for vocational training or education for returning citizens.

By investing in education and skill-building, you’re not only protecting your future from inflation but creating lasting opportunities for economic stability and personal fulfillment.

Understanding and Asserting Your Financial Rights

Knowing and asserting your financial rights is crucial in protecting yourself and your family from financial exploitation, debt traps, and other harmful practices that can exacerbate the impact of inflation. Here’s a comprehensive guide to your financial rights, practical tips to defend them, and resources available to ensure your protection:

Fair Debt Collection Practices

The Fair Debt Collection Practices Act (FDCPA) protects you from harassment and unethical behavior by debt collectors. Under this law, debt collectors are prohibited from:

• Using abusive language or threats.
• Calling repeatedly or at unreasonable hours.
• Falsely representing the amount or legal status of a debt.
• Contacting third parties (family, neighbors, employers) about your debts without your permission.

Practical Steps if You’re Harassed by Debt Collectors:

• Clearly communicate in writing that you wish the collector to stop contacting you.
• Request debt validation, meaning the collector must prove you owe the debt.
• Keep detailed records of all interactions, including dates, times, and names of collectors.
• File a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov ¹⁹ if your rights are violated.

Avoiding Predatory Lending

Predatory lending targets vulnerable individuals by offering easy loans at extremely high-interest rates. Common examples include payday loans, rent-to-own agreements, and auto title loans. These loans often trap borrowers in cycles of debt, making it nearly impossible to repay fully.

How to avoid predatory lending:

• Always read and understand loan terms thoroughly before signing.
• Avoid loans with extremely high-interest rates or hidden fees.
• Consider safer alternatives such as loans from reputable community credit unions or nonprofit organizations.

Protecting Yourself from Fraud and Financial Exploitation

Financial scams disproportionately target financially vulnerable populations, including families of prisoners and returning citizens. Common scams include identity theft, fake financial aid or loan offers, and credit repair fraud.

Practical tips to avoid financial scams:

• Never share personal information or banking details unless you’re sure of the recipient.
• Verify organizations through independent sources before providing sensitive information.
• Regularly monitor your credit report for unusual activity through AnnualCreditReport.com ²⁰.

Know Your Rights as Consumers

Educating yourself on basic consumer rights empowers you against exploitation:

• Truth in Lending Act (TILA): Ensures lenders clearly disclose loan terms and costs upfront, protecting you from hidden charges and deceptive practices.
• Equal Credit Opportunity Act (ECOA): Prohibits discrimination by lenders on the basis of race, gender, age, or marital status. Knowing your rights under ECOA ensures fair access to credit.

Resources and Organizations

Several organizations and resources are dedicated to helping consumers protect their financial rights:

• Consumer Financial Protection Bureau (CFPB): Offers guidance, complaint resources, and financial education materials to help you assert your rights and navigate financial challenges.
• National Consumer Law Center (NCLC): Provides resources and advocacy around consumer rights, especially useful in fighting predatory loans and unfair financial practices.
• Legal Aid: Many communities offer free legal services to assist with debt disputes, consumer protection issues, and financial rights violations. Locate these resources through your local community center or online at LawHelp.org ²¹.

By thoroughly understanding and proactively asserting your financial rights, you can defend yourself against financial exploitation, protect your hard-earned money, and build a stable financial future for yourself and your family.

Advocating for Sound Money

Realistically, inflationary policies are systemic issues. Getting involved in advocacy is crucial for long-term change:

• Educate your community on inflation’s hidden impacts and advocate for monetary reforms that prioritize everyday people. Connect with grassroots movements or local organizations advocating responsible financial policy.
• Engage your representatives by sharing experiences and concerns through calls, emails, and meetings, promoting awareness about inflation’s real-world impacts.

Further Reading and Resources

Educating yourself further is essential. Recommended resources:

• “The Bitcoin Standard” by Saifedean Ammous: This book explains why Bitcoin represents a strong defense against inflation ²².
• “Rich Dad Poor Dad” by Robert Kiyosaki: A foundational guide for building wealth, understanding assets versus liabilities, and making smart financial choices.
• Khan Academy Finance Courses: Free educational resources covering everything from basic budgeting to investment concepts. ²³

Conclusion

Inflation isn’t going away, but your ability to manage its impact can dramatically improve. By understanding budgeting basics, investing wisely—especially using accessible tools like Bitcoin—and continuously improving your financial literacy, you and your family can thrive despite the systemic odds stacked against you.

Remember, education and proactive action are your greatest allies. Take these steps now to ensure your financial security and reclaim your future.

Stay tuned for more practical financial education guides each week here on Pathways to Success.

Here is a consolidated list of sources used:

1. Mint (Budgeting Tool): https://mint.intuit.com/

2. Ally Bank (High-Yield Savings Accounts): https://www.ally.com/

3. Cash App (Bitcoin Purchases): https://cash.app/

4. Trust Wallet (Bitcoin Wallet): https://trustwallet.com/

5. Ledger Hardware Wallet: https://www.ledger.com/

6. Rakuten (Cashback Program): https://www.rakuten.com/

7. Chime (Secured Credit Cards): https://www.chime.com/

8. Annual Credit Report: https://www.annualcreditreport.com/

9. Coursera (Online Learning Platform): https://www.coursera.org/

10. edX (Online Learning Platform): https://www.edx.org/

11. The Bitcoin Standard by Saifedean Ammous: https://mises.org/library/bitcoin-standard-decentralized-alternative-central-banking

12. Khan Academy (Financial Courses): https://www.khanacademy.org/

13. TreasuryDirect (TIPS): https://www.treasurydirect.gov/

14. Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov/

15. LawHelp.org (Legal Assistance): https://www.lawhelp.org/

16. Bitcoin.org (Bitcoin Education): https://bitcoin.org/

17. Exodus (Software Wallet): https://www.exodus.com/

18. Marcus by Goldman Sachs (Savings Accounts): https://www.marcus.com/

19. National Consumer Law Center (NCLC): https://www.nclc.org/

1. https://mint.intuit.com/
2. https://www.ally.com/
3. https://www.treasurydirect.gov/
4. https://cash.app/
5. https://www.coinbase.com/
6. https://trustwallet.com/
7. https://www.exodus.com/
8. https://www.ledger.com/
9. https://bitcoin.org/
10. https://mises.org/library/bitcoin-standard-decentralized-alternative-central-banking
11. https://www.rakuten.com/
12. https://mint.intuit.com/
13. https://www.annualcreditreport.com/
14. https://www.chime.com/
15. https://www.coursera.org/
16. https://www.edx.org/
17. https://www.coursera.org/
18. https://www.edx.org/
19. https://www.consumerfinance.gov/
20. https://www.annualcreditreport.com/
21. https://www.lawhelp.org/
22. https://mises.org/library/bitcoin-standard-decentralized-alternative-central-banking
23. https://www.khanacademy.org/

Evelyn Hart

I hold a PhD in Educational Leadership with a specialization in Science and Technology. Over the past fifteen years, I’ve written extensively as a science and technology reporter, specializing in articles designed to make complex topics accessible and engaging to underserved communities. I most enjoy crafting stories that clearly and compassionately bridge knowledge gaps. My favorite articles provide readers practical, actionable advice that can positively change their lives. My goals at GPS are to empower prisoners and their families with education in science, technology, economics, and finance, enabling meaningful opportunities during incarceration and after release.

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