If you have bought anything recently, you have probably noticed inflation everywhere, from the gas pump to the grocery store. In fact, the annual inflation rate is now the highest it has been since 1982, at 7%. Want to prepare in case the rate rises even higher? Here’s what to do…

First Steps To Prepare For Inflation

First, we need to define rising inflation, so everyone’s on the same page. Simply put: as the rate of inflation increases, money’s purchasing power decreases. For example, what cost $80 ten years ago now costs $100! And it’s worse now more than ever! As stated, we are currently dealing with the highest inflation rate since the 1980s, according to recent Department of Labor statistics.

“Everyone is just feeling the hurt right now of all these consumer prices that have risen, exponentially, right, everybody’s feeling it,” Jennifer Bloom of Bloom Advisors, a successful asset management and financial planner in Michigan, explained in an interview last week with ABC News. Thankfully, there are some things you can do to protect yourself against rising inflation.

The first step? Start budgeting! “I think people need to first get a hold of their expenses,” Bloom said. “The best thing that consumers can do during times like this is to control what they’re spending, what is going out.” Next, pay down any debt you have, especially if you have some savings.

Next, be proactive, especially if you have savings in cash. Jennifer says to shop for the best rates for that money. “If you have debt, high-interest debt, credit card debt, now is the time to really think about paying that down,” Bloom advised. Why? “The Fed has signaled that rates are going to increase. The first people who are going to get hit are going to be consumers.”

Debt not a problem, but want to make some wise investments that will not be hurt by inflation? Well, there are some solid options, despite the rate of inflation…

Now, Dive Into More Complicated Tasks

If you already have a budget and are looking for a low-risk investment during high-inflation times, Bloom suggests United States Treasury issued I-bonds. “This is a product that is designed to help you curb inflation,” the financial planner explained. “It’s an attractive offer. At 7.12% until April of 2022, which is, you know, probably as good as it’s going to get, it’s a pretty good rate.” Of course, as always, there are a few stipulations. First, you can only spend $10,000 per person, and you must hold the bonds for at least a year. Finally, if you cash out the bond before five years, you forfeit interest from the previous three months.

There are also other options for investment. For instance, if you own a home and have not refinanced, Bloom says now is the perfect time to do so. In the meantime, make sure you review your current investments! “We believe in a well-diversified portfolio and well-diversified portfolios can have a fair amount of flex in terms of protecting for inflation,” Bloom explained.

Finally, Bloom’s biggest tip is to remain calm. “Stay calm, be smart, fear and greed are the two most common dangerous emotions for investors. You really want to be careful before you make any rash decisions,” Bloom advised. If you keep these ideas and goals in mind, you are sure to make it through high inflation times with little difficulty!

Sources: ABC News, Nationwide, Rehmann