Inflation is here. There is no arguing the fact. The only questions left are how bad will it be, and what can we do about it.
Yes, I know the *Government* numbers on inflation seem low. At this point I could spend hours writing words in a row about why the Feds numbers are fantasy, but why waste my time? If you already know, you know. If you don't care, or refuse to understand because it threatens your tribes power base, why should I make the effort?
If you want to know what the reality is, do your research on three topics. 1) What inflation is. 2) How the feds measure inflation, and how often they have changed that method for political reasons. 3) Try to understand what the 'Chained Consumer Price Index' is, and what it means to you.
What can we do about inflation? On a personal level, the name of the game is family survival for most of us. We can't change the fact that inflation is going to tax the American public so bad, we'll be praying for a tub of Vaseline to go with it. All we can do, in most family situations, is do our best to survive and thrive under imposed adverse financial conditions.
What inflation means is our cash, cash equivalents, and pay will be worth less. Since the actual numbers won't change there, we will see it as price increases. Nobody will reach into your wallet, take out a dollar bill, scratch out the 1 and replace it with 8/10ths of 1. What will happen is that fountain soda which used to cost $1 will now cost $1.20.
The soda isn't worth more.... the dollar buying it is worth less.
Most families don't have the financial reserves to do the big things in preparing for inflation. Buy property, buy stocks, buy metals as investments, etc. What we peasants can do is far more limited.
Think about it. Loans you have now with fixed payments.... you will be paying a year from now with dollars worth less. The payment will not change, but the *value* of what you are paying with goes down. That means it might be foolish to pay off debts now, especially if the debt rate is preferential.
Debts that have you floundering though.... NEVER a good thing. Get rid of them as fast as you can under any circumstances.
1) If your family uses a commodity (toilet paper, dog food, beer, heating oil, etc) and you can safely store quantities of it.... start buying it now. Tomorrow it will cost more, so buy it today.
Don't go crazy, but do think long term. If your heating oil tank is empty, fill it now with 5-5-21 money. It's nearly certain that 10-5-21 dollars will be worth less, so it will take more of them.
2) Expand the pantry. Dry basements are good, garages not so much. Think reasonable temperatures, dry, and away from insects and rodents. If you typically bought the family groceries on a weekly basis, begin thinking in months. That allows for better deals in bulk as well. Shop smart! Buy what you will use, not what sounds good, and not on a whim. Buy on sale, and be ruthless about it.
3) Luxuries.... yeah, those are going to cost more. With your paycheck holding less actual buying power in the future, some things might have to be let go. For me, good booze, cigars, and ammo for plinking fun. We can either plan now on having less luxury, or plan now to stock up on what we may not be able to afford later.
4) If you know a commodity real well, and it happens to be a concentrated store of wealth, AND you can buy it very favorably at this time.... consider calling it 'An Investment' and setting aside an amount for sale later. I know folks who have done this with wine, ammo, cigars, magazines, used tools, freon, transmissions.... follow your expertise here, but stay in your lane. Go with what you *know*.
5) Get you house in order, and plan on being flexible. It's easier to change lanes when the traffic is lighter, right? Well, it's easier to be adaptable in home life when the house is organized and ready for it. If the heating oil tank is low and fuel prices are high, then be prepared to run the wood stove. That means a stack of firewood now.... not some likely trees way out back under the snow. Physical work... you know.... get off yo butt and do it.... is a form of wealth in it's own right.
Speaking of being flexible, take a long hard look at where your money is spent and try to find cheaper alternatives. I love me a good aged steak, but chili made with leftover meat scraps is pretty high on the list as well. I also enjoy top shelf Bourbon, but mid-shelf Vodka can do up a decent cocktail at half the price, and stretch further.
Ideally, have your family in a position to ride out inflation without lowering your lifestyle more than necessary. Have the family finances in a situation where big price increases don't have to equal trouble paying the bills. Many a wealthy mans fortune has been made buying up real property in hard times, and no begrudging them that.... but don't let yourself be forced into the short end of that deal.
How bad could it get? We've seen real inflation numbers (not government fantasy bilgewater) in my lifetime of 20-30% a year. What hurts most is it really strikes in areas we use and need the most. Housing, heating oil, food, gasoline.... the things our daily lives depend on (and the things the Feds leave out of the math on purpose).
It's difficult to think about it when the issue shows up as steady price increases. So, think about it differently. What would you do if you woke up tomorrow and you family income was slashed by 40%? What would you do differently? What you choose to let go?
Well.... start doing all that now, while you can, and it hurts less.
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