Broker Check

Preserving Your Purchasing Power: 5 Ways to Beat Inflation in 2023

June 13, 2023

Preserving Your Purchasing Power: 5 Ways to Beat Inflation in 2023

Inflation is a continuous concern for individuals looking to protect their hard-earned money. In 2023, it becomes even more crucial to safeguard your finances against rising prices and erosion of purchasing power. Here are five essential strategies to help protect your money from inflation:

1. Diversify your investments: One effective approach to combat inflation is to diversify your investment portfolio. Consider allocating your funds across various asset classes, such as stocks, bonds, real estate, and commodities. Diversification helps mitigate risk and can increase the chances of earning returns that outpace inflation. It's crucial to conduct thorough research or seek advice from a financial professional to ensure your investments align with your risk tolerance and financial goals.

2. Invest in inflation-protected securities: Another strategy is to invest in inflation-protected securities, such as Treasury Inflation-Protected Securities (TIPS). These bonds are specifically designed to adjust their value in response to inflation, seeking to ensure that your investment keeps pace with rising prices. TIPS provide a reliable source of income and principal protection against inflation, making them an attractive option for preserving your money's value.

3. Consider investing in real assets: Real assets, such as real estate, commodities, and infrastructure, tend to hold their value during inflationary periods. Investing in these assets can provide a hedge against inflation as their prices often rise in tandem with the general price level. Real estate, in particular, can offer the potential for both income generation and capital appreciation. However, it's essential to thoroughly assess the risks associated with these investments and diversify within the real asset class as well.

4. Maintain a well-balanced budget: Inflation affects not only your investment portfolio but also your day-to-day expenses. To protect your money, it's crucial to maintain a well-balanced budget and monitor your spending habits. Identify areas where you can cut costs and prioritize essential expenses. Additionally, consider shopping around for the best deals, compare prices, and take advantage of discounts and coupons. By being mindful of your spending and making informed choices, you can minimize the impact of inflation on your overall financial well-being.

5. Save and invest regularly: Regular saving and investing can be an effective long-term strategy to combat inflation. By consistently setting aside a portion of your income and investing it wisely, you can build wealth over time. The key is to ensure that your investments outpace the rate of inflation. Consider automating your savings and investing process, such as setting up automatic contributions to retirement accounts or investment plans. This disciplined approach helps you stay on track and takes advantage of the power of compounding to preserve and grow your wealth over the long term.

In conclusion, protecting your money from inflation in 2023 requires a proactive and well-rounded approach. Diversifying your investments, considering inflation-protected securities and real assets, maintaining a balanced budget, and saving and investing regularly are all effective strategies to safeguard your finances. Remember, it's essential to stay informed, adapt to changing economic conditions, and consult with financial professionals when needed to make informed decisions that align with your specific financial goals.


For Educational purposes only. Not to be relied upon as financial, tax or legal advice. All investing is subject to risk, including the possible loss of the money you invest. No strategy assures success or prevents against loss. Diversification is a strategy designed to help manage investment risk. It does not guarantee profit or protect against investment loss in declining markets. 5750004RG_Jun25