TAKE BACK YOUR FINANCIAL POWER: SIX TIPS TO PROTECT YOUR BUYING POWER AND ASSETS DURING INFLATION
The average price of a dozen large Grade A eggs in June was $3.78, down from $4.55 in May. That’s Grade A good news on the money and inflation front.
Unfortunately, most everything else we buy, consume or rent is going up.
As of June 2025, housing prices were 4.0% higher than a year before.
Then there’s food. Average prices rose 3 %. And car insurance went up 12 % since 2024.
Surprisingly, since January 2020, the cost of car insurance has risen 56%, according to the U.S. Bureau of Labor Statistics, in part because of inflation but also because of supply chain shortages, the cost and complexity of vehicle parts, and more frequent and severe accidents, among other factors.
Inflation—can’t live with it. Turns out, we can’t live without it either.
A world without inflation, or even negative inflation, known as deflation, might seem like a bonus, but in reality, it would destabilize our economy.
Low, steady inflation is generally what we want to see for economic growth and stability because it encourages us to spend and invest (buy now before the price goes up!) and can lead to wage increases for workers. This can create a positive cycle of increased demand and production, as businesses respond to the higher demand by investing and hiring.
Since the pandemic, consumer prices are 24% more expensive, according to a Bankrate analysis of Bureau of Labor Statistics data . What that means for our pocketbooks is that we need about $1,240 to buy the same goods and services that cost $1,000 in 2020.
It may have to work smarter, but your money and assets can stay downside aware and even see some gains during higher inflation. Here are some of our top strategies.
Three Ways to Protect Your Money During Inflation
Assess how much you have in savings.
Emergency savings: A good emergency fund should cover three to six months of essential living expenses. This provides a financial cushion to handle unexpected events like job loss or a major repair without affecting your other financial goals like retirement accounts.
TIP: Start with this emergency fund calculator.
Savings accounts: Shop around for savings accounts that offer the highest possible interest rates, especially from online-only banks. Also consider Treasury Inflation-Protected Securities (TIPS) and I-Bonds. These are government bonds designed to protect against inflation.
Here’s a great primer on TIPS and I-Bonds from Kiplinger.Prioritize paying off high-interest debt. Make your money work! Pay off credit cards and other high-interest or variable-rate loans first, as these can become more expensive during inflation. (Paying off high-interest debt first is a smart strategy at any time but especially impactful on your money during higher inflation periods.)
The hardest thing to do? Prioritize needs over wants. Before buying anything, especially an impulse purchase, ask yourself if you can do without it right now. The extra spending will most certainly impact your budget for essential needs, like housing, food and utilities and can turn your retail-therapy “high” into a financial-insecurity “low.”
Three Strategies to Preserve Your Assets During Inflation
Diversify your portfolio. Consider assets that tend to hold or increase their value as prices rise. This includes:
TIPS and I-Bonds
Real estate
Commodities like gold, oil and agricultural products
Short-Term Bonds
Stocks
2. Keep your eye on the prize: Your long-term portfolio returns. Our June blog, “The Magic of Compounding Interest and Making It Work for You,” discusses the essence of why you must stay in the game—even when it gets tough—to gain the win. The power of compounding means the longer your money is invested, the more it benefits from compound interest, where returns generate further returns.
3. Reduce potential taxes. Taking advantage of market volatility to engage in strategies like tax-loss harvesting may potentially lower your overall tax bill, which can help offset the bite of inflation.
While inflation is still a bit of a runaway horse—it came in at an overall annual rate in June of 2.7%, which is above the Federal Reserve’s target of 2 %—some prices are falling, like travel and electronics, which have seen prices decrease compared to a year ago.
No matter which way the winds of inflation blow, remember you still hold power over your money and assets. The goal: prioritize financial stability and protect your purchasing power.
As always, our team at Alia will work with you to best navigate times of higher inflation, so that your money and assets are preserved and working even harder for you.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.
