Inflation impacts everyone regardless of your job and how much money you make. Rising costs on everything from gas and energy prices to groceries and entertainment can put a serious strain on your bank account.
Even if you have a good job, the bottom line is that your money does not go as far as it used to, so it is important to protect yourself from inflation. One way to do so is by improving your employment situation.
There are many ways that you can protect yourself from inflation and even benefit from it.
Strategies to Maximize Your Employment During Inflation
Although inflation is tough, there are many ways you can weather the storm. From tightening your budget and cutting costs to getting a part-time job or creating a side hustle, if you want to maintain a lifestyle you have grown accustomed to in the past, some changes need to be made.
Here are some strategies that you can use to maximize your employment to help fight inflation.
1. Get the most from your HR benefits
One of the ways you can maximize your employment to help combat inflation is to fully understand your employee benefits. There may be some benefits you are paying too much for or some that you are not fully utilizing.
Some of the most lucrative HR benefits that people overlook are:
- Pre-tax commuting benefits: You may be able to deduct public transportation, parking or carpooling expenses from your paycheck as pre-tax income.
- Employee assistance programs: Many employers provide access to free or highly discounted mental health counseling, nutrition advice and more. These services are typically pricey, so take advantage while you can.
- Gym memberships: With the average gym membership cost $75 per month in some states, you can potentially save hundreds with an employer-paid for plan.
- Flexible work arrangements: Does your employer allow you to work from home a couple times a week? If so, you can save hundreds on commuting expenses, dining out and wardrobe costs. You'll also have more time for chores at home, potentially decreasing your need for ordering food in and paying for cleaning services.
Your company should have detailed information about your benefits available to you online, in an employee handbook, or directly in your work contract. If not, then you should consult with human resources or your supervisor to get the information you need.
2. Evaluate your health plan
One of the most complex, yet important elements of your benefits package is your health insurance plan. Are you paying every month for a premium healthcare plan that you never use?
Are there other plans with lower premiums and higher deductibles that can be subsidized with a health savings account?
These are the important questions you will want to answer by taking a deep dive into the details of your health plan and crunching the numbers. If you do go the route of an HSA or FSA, keep in mind that any amount that you contribute to that account can decrease your taxable income, saving you money year after year.
3. Take advantage of 401(k), paid time off, and more
Aside from your health benefits, you should also take a look at benefits like 401k matching and PTO. Although your 401(k) doesn’t technically help you immediately, you should make sure you are getting the company’s maximum rate of contribution matching to save for retirement.
When it comes to PTO, some companies have a plan where you bank hours for every week or month that you work. These types of plans may have an option where you can have your PTO hours paid out without having to take time off.
Although you should try to always use your PTO, if you are strapped for cash and can’t afford a vacation anyway, you may be able to get a quick surge of funds by cashing in your accumulated PTO hours.
For other additional miscellaneous benefits, make sure you are being reimbursed for using your vehicle for company business, meals and travel expenses when on the road, and anything else you may be forgetting that you should not be paying for out of pocket.
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4. Improve your marketability
When you are reviewing your benefits, also take a look to see if there are any educational benefits like tuition reimbursement or an education stipend. You may be able to improve your marketability by completing a degree program or obtaining a special certification in your field, and you could do it at no cost to you.
With your new degree, certification, and skills, you could leverage them to apply for a new job at your company, receive a promotion, or ask for a raise.
5. Ask for a raise
For some, asking for a raise is an awkward situation that they would like to avoid, however, you never know unless you ask.
Before bringing up the subject with your superiors, you should prepare yourself by documenting your contributions to the company, completing market research on how your salary compares to others with the same title and responsibilities, and preparing an alternative proposition.
An alternative proposition may include something like additional PTO, access to a company vehicle, or an opportunity to create an action plan with your boss outlining what you need to accomplish to get a raise or receive a promotion.
Asking for a raise does not need to be awkward. After all, you are in a place of business where deals and compromises are created all the time. Just remember to do your research and be confident.
There may be some benefits you are paying too much
for or some that you are not fully utilizing.
6. Find additional sources of income
Another option for maximizing your employment during inflation is to seek additional sources of income. You could look for a part-time job serving tables a few nights a week or working retail on the weekends. You could also take a look around your place and see if you have any unused electronics, instruments, or clothing to sell on Facebook Marketplace.
Another additional source of income that could be fun and potentially extremely profitable is developing a side gig. You could sell your own hand-crafted products on Etsy, start an Amazon drop-shipping business, or even start your own DJ business and perform at weddings or private parties on the weekends.
When it comes to finding the perfect side gig, you will want to find something that utilizes your skills and passions while having the potential to generate revenue.
Match your savings and investment strategies for inflation
In addition to maximizing your employment and seeking additional sources of income, you are going to want to adjust the way you spend, save, and invest.
It is important to understand how to budget during inflation, however, it is equally important to understand how to capitalize on some of the benefits of inflation.
When it comes to spending, you are going to want to trim the fat where you can. Maybe you have too many subscription services like Netflix, Disney+, and HBO. According to research, the average American spends over $200 a month on subscriptions. In times of inflation, you'll want to consider cutting back on discretionary spending like travel, dining out and entertainment.
For mental health, it is important that you still treat yourself sometimes and enjoy time with friends and family, but when inflation is high, it is a good time to evaluate where your money is going and cut back where you can.
Inflation is a great time for saving money. Interest rates are high and there are plenty of opportunities to open a money market account, high-yield savings account, or a Certificate of Deposit (CD).
For example, if you invest $500 in a Certificate of Deposit (CD) offering a 4.5% interest rate compounded daily, after 5 years, you would have approximately $641.62, earning over $100 in interest.
(Read our Ultimate Guide to CDs).
When you cut down on your discretionary spending, you should be using those savings to build an emergency fund, pay down existing debt, and take advantage of higher interest rates.
Believe it or not, another benefit of inflation aside from higher interest rates on savings accounts is that certain low-risk investments tend to do well when inflation is high. Some of the best types of investments during inflation include:
- US Treasury Bonds
- Treasury inflation-protected securities (TIPS)
- Real estate
Inflation is a great time to earn higher interest rates on your savings.
Although inflation tends to be a difficult time for many Americans struggling to keep up with rising costs, there are many ways that you can protect yourself from inflation and even benefit from it.
Protecting yourself from inflation may include taking the initiative to ask for a raise, create a side gig, or learn a new skill to earn a promotion or make a career change. Benefiting from inflation may include actions like cutting back on discretionary spending and opening a high-yield savings account or investing in US Treasury bonds and other inflation-proof investments.
The point is, by doing your research and knowing how to adjust your personal finances, you could actually come out from a period of high inflation better off than when you started.