Hyperinflation, the rapid devaluation of currency because of government overprinting, is a perpetual concern given the rapid rate at which fiat currency is being produced. The effects of the inflation that occurs at such a fast pace are many, but the most significant of them will be that prices rise and the purchasing power of the U.S. dollar declines. Those who will suffer the worst of all are those who are on fixed incomes. Though the specter of hyperinflation looms large, there are some actions you can take to beat it. Here are steps you can take to beat hyperinflation.
Pay Off Debt
It is essential, first of all, to pay off every debt that you can. Increased prices will mean that your budget will have to be tighter, and having money going towards debt payments means that it is not available to cover other expenses. Paying off credit card debt, housing debt, and other loans now will release funds that can be spent on other things later.
Boost Your Income
Begin working now to boost your income. Going back to school for a new or advanced degree can often increase your earning potential. This will help you save up to help stave off the effects of hyperinflation. Looking for a part-time job and/or asking the boss for a raise are other good ways to increase your take-home pay.
Refinance your home or other debts when historically low interest rates present themselves. If we enter a period of hyperinflation, the Federal Reserve will increase base interest rates and the banks will follow suit. This makes it even more expensive to borrow, so lock in those low interest rates today.
Invest in the Market
Get knowledgeable about the stock market and begin investing there as soon as possible. The returns offered in a well-balanced portfolio of stocks and bonds have historically been the best way to avoid the most detrimental effects of hyperinflation. Look for trusted companies that pay out a good dividend. Inflation protected securities such as treasury inflation protected securities can also be a good way to lock in returns for the long term and avoid the worst effects of hyperinflation.
Save for Retirement
Closely related to the idea of investing in the stock market in order to survive hyperinflation is the necessity of contributing today to your IRAs and other retirement plans. If hyperinflation such as was seen in Germany was to start, you may not have enough money to put into your retirement accounts. Save today and you will enjoy your retirement years.
Add Money-Saving Skills
Look into skills and techniques that can save you money over the long run. A home vegetable garden, learning to cook, and extensive use of coupons can help mitigate the effects of hyperinflation, at least on the food bill. Learn some basic car maintenance skills so that you can change the oil yourself and not have to waste money paying someone else to do it.
Consult Thrifty Friends
Ask thrifty friends what they do to save money. These savers can help you learn how to be wiser with your funds, a skill that will benefit you greatly whether or not hyperinflation ever begins.
In sum, the best way to prepare for hyperinflation is to start today. Do not wait until the last minute; otherwise, you will miss out and might find yourself in a tight spot once prices begin to rise dramatically.