Inflation is down from its peak, but consumers’ wallets have already been dented like a Mitsubishi Mirage getting T-boned at an intersection.
In November, food prices increased by 10% over the previous year. Eggs have gotten so expensive that instead of posing with their sports car for their dating app photo, guys are taking pictures holding a dozen cage-free, large organic eggs. (If they’re not, they should be. Am I right, ladies?)
Higher prices are putting a major crimp in a lot of people’s lifestyles. In order to neutralize inflation, you have to either earn more or spend less.
Fortunately, there are easy solutions to both, and it doesn’t require you to stop enjoying the things you like to do.
A lot of investors were spooked out of stocks by the bear market last year or by the threat of recession this year. That’s a huge mistake.
Stocks go up over the long run. We know this has always been the case, so don’t bail on the market.
If you have money that you absolutely need within three years to pay bills, keep that out of the market, as anything can happen in the short term.
Longer-term money should remain in stocks and bonds. If you stay invested, you are much less likely to have similar money problems in the future that you may be having today. Give it time, and let the market do what it does best, which is grow wealth by roughly 10% per year.
For your cash, don’t keep your money in the bank unless you’re getting a great rate. Most banks pay bupkis. These days, it’s incredibly easy to move money around different financial institutions to ensure your cash is earning the highest return.
The highest-yielding savings account available right now is through MySavingsDirect, a division of Emigrant Bank. The account pays 4.35%, and you need only a $1 minimum deposit.
Popular Direct is next at 4.26% with a $5,000 minimum, and UFB Direct pays 4.21% with no minimum deposit.
There are quite a few banks offering rates of 4% or higher on savings accounts.
If you’re not ready to switch banks, you can earn 4.6% by owning a U.S. Treasury that matures in three months or 4.8% for one that matures in six months. Those are higher rates than most certificates of deposit pay, and you won’t have to lock up your money for as long.
For your longer-term money that is invested in the stock market, buy Perpetual Dividend Raisers. These are stocks that raise their dividends every year. That way, the income produced by your stocks grows every year and keeps up with – or beats – inflation.
A stock like Texas Instruments (Nasdaq: TXN) has grown its dividend by a compound annual growth rate of 15% over the past 10 years. If you had bought the stock 10 years ago and received $100 in dividends, today you’d be collecting $490 and you’d be earning 11.2% annually on your money, just from dividends – not including any price appreciation. That 11.2% would go a long way in fighting inflation.
Easy Ways to Save Money
One of the simplest things you can do is use GoodRx either online or by downloading the app on your phone. It will help you save hundreds or even thousands of dollars on your prescriptions.
All you do is enter your ZIP code and the medication you need, and the app will show you which stores have it for the least amount of money. And the results can be alarming.
For example, a patient in Cresco, Pennsylvania, will pay just $0.10 for a Lipitor prescription at Rite Aid versus $30 at Target and the average retail price of $62.14. That’s not per pill. That’s for the full month’s prescription.
A shopper in Columbus, Ohio, looking for testosterone gel will pay as little as $46.55 at Discount Drug Mart instead of $163 at Target or CVS. The average retail price is $487.40. That’s some difference.
Anyone on any prescription medication can save money using GoodRx. It is free to use, though it does have a premium service as well.
If you want cash back on many things that you buy, check out Rakuten. This is also a free service. Once you sign up, just visit Rakuten’s site and click through to the store you want to shop at, and you’ll receive cash back on your purchases.
The amount varies depending on the store. You’ll get 16% back at ProFlowers (good news for Valentine’s Day), 2% at Macy’s and 3% at Walmart. The numbers can add up, and you can receive a decent-sized check in the mail.