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business Thursday 5 May 2022

How to save more when inflation makes your money count less

By CHANELLE BESSETTE of short-term cash — like an
NerdWallet emergency fund — acces-
When it comes to spending sible in a savings account,
power, inflation means that but if you have savings that
things cost more and that you don't expect to need
your money becomes less for a year or more, you may
valuable. When a period want to consider invest-
of high inflation hits — like ing those funds or buying a
right now — you may want treasury bond.
to consider changing up "For someone who has a lot
the way you handle your fi- of cash sitting on the side-
nances to help protect the line, (investing) could help
value of your cash. you not lose money," Russell
"Inflation is a time for inves- says. "More people might
tors and savers to reevalu- be willing to take on more
ate their strategies," says In this April 3, 2019, photo a tip box is filled with U.S. currency in New York. risk because they want a
Walter Russell, CEO of fi- Associated Press higher rate of return."
nancial adviser firm Russell of inflation. you. healthy meal. Russell also recommends
and Company. LOOK FOR HIGH-YIELD IN- FIND WAYS TO KEEP COSTS "I'm concerned about rising that consumers look into
Through the Federal Re- TEREST RATES LOW food costs and the impact getting TreasuryDirect Se-
serve, the government tries It can be frustrating to not If you haven't looked over that will have on the entire ries I savings bonds, which
to combat inflation on a be able to get loans for big your budget in a while, now supply chain," Claypool can give an interest rate of
large scale by raising the purchases as easily during may be a good time. Dur- said through direct mes- over 7% on up to $10,000
federal funds rate, which is periods of high inflation. ing the pandemic, you may sage. "I'm using the time for a one-year term. These
the interest rate that com- Still, consumers can take have subscribed to multiple now to prepare for future bonds are basically like a
mercial banks use to bor- advantage of higher inter- streaming services that you food insecurity by learning certificate of deposit: You
row and lend money to est rates on bank accounts don't use anymore, or you what food my body actu- put your money in one for
each other. to fight the effects of infla- might be spending more ally needs compared to a year, and by the end of
When the cost of borrow- tion on their cash. Bank ac- money dining out or pay- what I enjoy eating. This the year you have a guar-
ing becomes more expen- count interest rates usually ing for more convenience might seem drastic, but it's anteed rate of return that
sive, higher interest rates don't totally beat the rate services now. helping me save money hopefully stays higher than
trickle down to consumer of inflation, but these ac- Some people are taking and eat better in the short the current rate of inflation
products such as loans and counts can help hedge even more radical steps term." — so your money won't lose
mortgages, making them against inflation far better to save money. Amanda Not everyone can or wants value.
more expensive. But higher than keeping cash at home Claypool , a financial blog- to move into their car, but The government will con-
interest rates may also ap- or in a low-rate account. ger based in upstate New Claypool's money-sav- tinue to review inflation
ply to deposit accounts, The national average an- York, has recently made ing tactics can work on data and make appropri-
meaning that banks start nual percentage yield for larger lifestyle changes to a smaller scale. You can ate changes to the federal
to offer higher interest rates savings accounts is 0.06%, keep her costs low in the bike more often instead of funds rate. However, there
on checking, savings and according to the Federal face of inflation. She spent driving everywhere, and are other factors that may
certificates of deposit. Deposit Insurance Corpo- 2021 living out of her car you can reevaluate your slow inflation in the coming
No one knows what the fu- ration, but there are plenty while driving around the food budget to add more year, such as changes to
ture will bring, but by mak- of financial institutions that country and plans to return cheap healthy meals. For a global supply chains that
ing changes to how you offer rates that are much to that way of living soon bigger change, you could might free up inventory
spend and where you keep higher — some even 1.00% to save on housing costs. downsize your housing to and lead to lower prices for
your money, you may be APY or more. To find these She's also been trying to save even more money. goods. No matter whether
able to weather times of in- rates, you can research trim her budget by biking CONSIDER INVESTING OR inflation goes up or down,
flation more easily. high-yield or high-interest 16 miles round-trip to work BUYING BONDS FOR LONG- though, it's a good idea to
Here are some ways to accounts and choose the and by eating more rice TERM SAVINGS keep an eye on ways to
save more during periods bank that works best for and beans, a cheap but It's a good idea to keep optimize your savings.q