Inflation occurs when prices go up and each dollar buys less. Right now, price inflation is outpacing wage inflation in the U.S. That means that everyday items are costing more, but most Americans aren’t earning more, so they can’t afford to buy as much as before. While some inflation is healthy each year, the consumer price index increased 8.5% over the last 12 months. The Federal Reserve generally aims for an inflation rate around 2% to keep prices stable while allowing for maximum employment. 

We can feel the impact of inflation every time we fill up at the gas pump and pay at the grocery store. For many families, rising inflation means making sacrifices to trim their budget. But another way to protect yourself during a period of high inflation is to make some extra cash and invest your money so it grows.

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What Is the Best Way to Make Extra Money During Inflation?

Pick Up a Side Hustle

A second job or freelance opportunity could give you the extra discretionary spending you need to withstand rising prices. There are jobs in the gig economy for people with a variety of interests — rideshare companies and on-demand apps for food delivery, package delivery, handyman services, dog walking, moving services, and more all offer opportunities to work on your own schedule. 

You may even be able to offer freelance services in accounting, design, marketing, web development, photography, or another area of expertise. Check out websites like Fiverr or Upwork to get started, and consider launching a professional website of your own to attract more customers. 

Resell Your Belongings

Rising costs impact everyone’s purchasing power and budget, causing some Americans to turn to secondhand goods to save money. You can take advantage of the demand for quality used items by reselling your gently-used clothing, home items, furniture, and electronics. Try listing these items for sale on sites like OfferUp, LetGo, Facebook Marketplace, and Poshmark. You can even list old baby gear on BabyQuip. 

Get Cash Back for Shopping

You can combat inflation by getting up to 10% back for your purchases at popular retailers and even grocery stores. Swagbucks allows you to earn points, called SB, every time you make a purchase at over 7,000 participating online stores. You can also scan your receipt after you shop in-store to get SB. You can redeem your SB for PayPal cash or gift cards. You’ll just need to create a free account to get started and you can earn a free $10 bonus. 

You can only use one cash back app or website for each purchase, so make sure you don’t visit other coupon sites once you click the store you want to visit through Swagbucks. However, you can double up on cash back if you use a rewards credit card to make your purchase. Choose a card that aligns with your spending and your lifestyle so you can maximize your earnings. 

Take Surveys for Cash

Market research companies want to know consumer opinions about new products and services. Survey sites like Swagbucks or InboxDollars match you with surveys you may qualify for and compensate you for completing them. You can easily make a few dollars a day taking surveys for money in your free time, whether you’re in line at the post office or vegging out on the couch. 

Rent Out Your Car, Home, or Garage

If you have a spare room, storage space, or a vehicle you don’t often use, you can turn those assets into passive income. Renting your car on Turo can be lucrative if you meet the requirements. For example, a Fiat 500 in Los Angeles earns an average of $7,617 per year, while a Jeep Wrangler in Denver brings in $17,273 per year on average. 

Listing your home, guest house, spare room, couch, or even treehouse on Airbnb or VRBO is another excellent way to bring in some extra money. For example, renting a private room in Manhattan brings in $2,592 per month on average, while renting an entire two-bedroom home in Nashville would earn $4,224 per month on average. 

Even if you only have a parking space, garage, attic, or empty closet in your home, you can rent it out to people in your community looking to store their stuff with Neighbor. 

Save Money on Insurance

You could be paying too much for auto or home insurance, and just switching providers could save you hundreds of dollars per year. Plus, when you get a free auto quote from Savvy through your Swagbucks account, you’ll get $10 just for checking your rate — you don’t need to sign up for a policy to earn the bonus. You might find a provider that can offer you significantly lower premiums as well, so you’ve got nothing to lose! 

What Investments Do Well in Times of Inflation?

There are multiple ways to combat inflation by investing. During periods of higher inflation, the best way to invest smartly is to diversify your investments. Financial experts often recommend investing a little bit at a time, so you can make financial decisions as market conditions unfold. Investors who feel overwhelmed by their options and need financial advice can always consult a certified financial planner. 

High-Yield Savings Accounts

A high-yield savings account provides greater returns than a typical bank checking account, especially since inflation has allowed for higher interest rates on these financial products. At the same time, savings accounts are more liquid than other investments, so you’ll be able to access the cash when you need it. That makes a high-yield savings account a great place to store your emergency fund or any cash you may need in the short term. 

Treasury Inflation-Protected Securities

Some of the safest investments are treasury inflation-protected securities (TIPS), which are backed by the U.S. federal government. When inflation rates rise, so does the principal price of TIPS, as well as the amount of interest paid on the security every six months. When TIPS mature after five, 10, or 30 years, investors receive the greater of the adjusted principal or the original principal. You can purchase TIPS from the government in $100 increments. 

Diversified Portfolio of Stocks

When investing in the stock market during periods of higher inflation, maintain a conservative allocation of stocks and bonds. You may also want to pick stocks expected to perform well during current conditions. For example, investing in energy and food manufacturing companies may yield higher returns. 

You can also invest in international markets. Foreign bonds from countries where inflation rates are steady can help protect you from losses. Two affordable options for investing internationally are exchange-traded funds (ETFs) and mutual funds. 

Real Estate

Even in an economic downturn, people need places to live. And housing prices tend to appreciate with inflation, making real estate an excellent inflation hedge. Plus, you don’t need to be a millionaire to invest in residential or commercial real estate, nor do you need to actively manage a rental property or worry about mortgage rates. Passive investment opportunities such as real estate crowdfunding and real estate investment trusts (REITs) can provide lucrative returns with a lower barrier to entry. 

Commodities

Commodities are raw materials such as gold, gas, or wheat. When consumer prices rise, so does the cost of agricultural goods, building materials, animal products, and energy sources. To invest in commodities, you can purchase ETFs that follow certain commodities indices. You can also purchase precious metals like gold, but history suggests that gold works best as a long-term investment, since prices can fluctuate and gold can lose value even during periods of inflation.

What Items Go Up During Inflation?

Inflation typically affects prices for raw materials. The current inflationary period is impacting these items the most: 

  • Groceries: Prices for food items at grocery stores are increasing more than the inflation rate. For example, eggs have increased in price 38% over the past year. If you start scanning your receipts with your Swagbucks account, you could make up some of that increase in cash back. 
  • Gas: While gas prices have come down since their peak a month ago, they’re still up 22% year-over-year. If you install the BPme rewards app, you can save $0.05 per gallon, plus get 100 SB ($1 USD) for signing up. 
  • Automobile prices: The price for a new car is 10% higher than it was a year ago. And with interest rates pushed up to control inflation, it’s even more costly to get a car loan. 

Prices for some items, like medical care, have increased slower than the overall inflation rate. 

Conclusion

During periods of higher inflation, consumers either need to find another source of income or control their spending in order to stay within budget. Luckily, there are some easy (and fun) ways to make extra money during inflation. Swagbucks users can earn a few extra dollars per day watching videos, playing games, taking surveys, browsing the web, and more. And as you earn more, you can invest wisely to keep up with inflation and prepare for your family’s future. 

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