{"id":36828,"date":"2022-11-28T04:47:35","date_gmt":"2022-11-28T12:47:35","guid":{"rendered":"https:\/\/financer.com\/?p=36828"},"modified":"2024-09-09T08:23:10","modified_gmt":"2024-09-09T15:23:10","slug":"beat-inflation-and-prepare-for-possible-recession","status":"publish","type":"post","link":"https:\/\/financer.com\/personal-finance\/articles\/beat-inflation-and-prepare-for-possible-recession\/","title":{"rendered":"5 Ways to Beat Inflation and Prepare for a Possible Recession in 2024"},"content":{"rendered":"<div class=\"fn_block block_fn_msg_box key-takeaways\"><div class=\"fn_block__icon\"><\/div><h3>Quick Take <\/h3><ul>\n<li>US inflation is at a 40-year high.<\/li>\n<li>The Fed has raised interest rates six times this year to drive prices down but inflation is still relatively high.<\/li>\n<li>It will take some time for the inflation rate to go down. In the meantime, you have to hedge against inflation.<\/li>\n<li>By continuously increasing the cost of borrowing money, the Fed may succeed in disincentivizing spending and driving inflation down but this may set the stage for a recession in 2023.<\/li>\n<li>Diversifying your investments is the best hedge against inflation and a good way to prepare for a possible recession in 2023.\u00a0<\/li>\n<\/ul><\/div>\n\n\n<p>In October 2021, <a rel=\"noreferrer noopener\" href=\"https:\/\/www.bls.gov\/charts\/consumer-price-index\/consumer-price-index-by-category-line-chart.htm\" target=\"_blank\">US inflation<\/a> hit 6.2% &#8211; the highest rate since 2008. In January 2022, it rose to 7.5% &#8211; <a rel=\"noreferrer noopener\" href=\"https:\/\/www.weforum.org\/agenda\/2022\/03\/inflation-pandemic-covid-united-states\" target=\"_blank\">the highest rate in 40 years<\/a>. <\/p>\n\n\n\n<p>In June 2022, it set a new high of 9.1% before falling to 8.5% in July. At the moment, it stands at 7.7%, which is still relatively high.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large shortcode-no\"><img decoding=\"async\" width=\"1024\" height=\"513\" src=\"https:\/\/financer.com\/app\/uploads\/sites\/11\/2022\/11\/12-month-chan-1024x513.jpeg\" alt=\"\" class=\"wp-image-36829\" srcset=\"https:\/\/financer.global\/app\/uploads\/sites\/11\/2022\/11\/12-month-chan-1024x513.jpeg 1024w, https:\/\/financer.global\/app\/uploads\/sites\/11\/2022\/11\/12-month-chan-300x150.jpeg 300w, https:\/\/financer.global\/app\/uploads\/sites\/11\/2022\/11\/12-month-chan-768x385.jpeg 768w, https:\/\/financer.global\/app\/uploads\/sites\/11\/2022\/11\/12-month-chan.jpeg 1348w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><strong><em>US Inflation 2002-2022<\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p>To curb inflation, the Fed has <a href=\"https:\/\/www.nytimes.com\/2022\/11\/02\/business\/federal-reserve-interest-rates-inflation.html#:~:text=The%20Fed%20has%20already%20lifted,raising%20rates%20half%20a%20point.\" target=\"_blank\" rel=\"noreferrer noopener\">raised interest rates six times<\/a><strong><em> this year<\/em><\/strong>. But as the chart above shows, inflation is still pretty high.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Why_is_Skyrocketing_Inflation_Such_a_Problem\"><strong>Why is Skyrocketing Inflation Such a Problem?<\/strong><\/h2>\n\n\n\n<p>Rising <a href=\"https:\/\/www.federalreserve.gov\/faqs\/economy_14419.htm\" target=\"_blank\" rel=\"noreferrer noopener\">inflation<\/a> means a steady rise in the general price level. If prices continue to rise, employees will start demanding higher wages to keep up with the increasing cost of goods.<\/p>\n\n\n\n<p>Higher wages will push up the cost for businesses which could translate to higher prices for goods.<\/p>\n\n\n\n<p>This can lead to an upward spiral of wages and prices which can weaken the purchasing power of money and deal adverse effects to an economy.<\/p>\n\n\n\n<p>To combat inflation, the Fed has been raising <a href=\"https:\/\/financer.com\/wiki\/interest-rate-apr\/\">interest rates<\/a>. When <a href=\"https:\/\/financer.com\/wiki\/effective-interest-rate\/\">interest rates<\/a> rise, businesses find it more expensive to borrow and invest which translates to less economic activity.<\/p>\n\n\n\n<p>Less economic activity means fewer jobs are created. A fall in economic activity can also lead to a slash in wages. Fewer jobs and less wages mean less money for households which translates to less spending.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"How_Inflation_Affects_You\"><strong>How Inflation Affects You<\/strong><\/h2>\n\n\n\n<p>High inflation is always associated with a serious problem: a decline in the purchasing power of money. Rising inflation means you need more and more money to buy the same quantity of goods.<\/p>\n\n\n\n<p>To fight this problem, the government employs <a rel=\"noreferrer noopener\" href=\"https:\/\/www.imf.org\/en\/Publications\/fandd\/issues\/Series\/Back-to-Basics\/Fiscal-Policy\" target=\"_blank\">fiscal<\/a> or <a rel=\"noreferrer noopener\" href=\"https:\/\/corporatefinanceinstitute.com\/resources\/economics\/monetary-policy\/\" target=\"_blank\">monetary<\/a> policy. An example of using fiscal policy to fight inflation is raising taxes to disincentivize spending. An example of using monetary policy to fight inflation is raising interest rates to increase the cost of borrowing money.<\/p>\n\n\n\n<p>Since raising taxes can make a government unpopular, raising interest rates has been the most favorable option for fighting inflation. This is evident in the fact that the Fed has raised interest rates six times this year.<\/p>\n\n\n\n<p>While increasing interest rates alleviates the problem of inflation over time, it raises the cost of borrowing money for businesses.<\/p>\n\n\n\n<p>But it&#8217;s not just businesses that find it expensive to borrow money. High interest rates also raise the cost of borrowing money even for individuals. For example, high interest rates mean that <a href=\"https:\/\/financer.com\/loans\/mortgage\/\">mortgages<\/a> will be more expensive.<\/p>\n\n\n\n<p>While the Fed is trying hard to combat inflation, it will take time to get back to pre-pandemic levels. This article is a guide to help you scale through the times.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"i5_Ways_to_Beat_Inflation_and_Brace_Up_For_a_Possible_Recession_in_2023\"><strong>5 Ways to Beat Inflation and Brace Up For a Possible Recession in 2023<\/strong><\/h2>\n\n\n\n<p>Here are five ways to beat inflation and prepare for a possible recession:<\/p>\n\n\n\n<ul>\n<li>Diversify your investment<\/li>\n\n\n\n<li>Cut Down Expenses<\/li>\n\n\n\n<li>Use Debt Responsibly<\/li>\n\n\n\n<li>Stock Up on Food and other necessities <\/li>\n\n\n\n<li>Have an <a href=\"https:\/\/financer.com\/wiki\/emergency-fund\/\">Emergency Fund<\/a><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"i1_Diversify_your_investment\">1. Diversify your investment<\/h3>\n\n\n\n<p>Investing is the best hedge against inflation. When you invest, you put your money to work by purchasing an asset that generates cash flow and\/or goes up in value. When it comes to investments, there\u2019s a wide range to choose from each with varying risk-to-reward ratios.\u00a0<\/p>\n\n\n\n<p>As a rule of thumb, the higher the risk associated with an investment, the higher the potential reward. The reverse is also the case, the lower the risk associated with an investment, the lower the potential reward.\u00a0<\/p>\n\n\n\n<p>Since risk is closely tied to reward in the world of investments, it&#8217;s important to take your risk appetite into consideration when deciding what to invest in.\u00a0<\/p>\n\n\n\n<p>Another key consideration when it comes to investing is time. Some investments are best suited for the short term, while others only yield good returns over the long run.\u00a0<\/p>\n\n\n\n<p>Here are three inflation-proof\u00a0 investments to consider:\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Real Estate <\/h4>\n\n\n\n<p><a href=\"https:\/\/financer.com\/blog\/5-ways-to-finance-your-real-estate-business\/\">Real estate<\/a> is a good option if you are looking to <a rel=\"noreferrer noopener\" href=\"https:\/\/raleighrealtyhomes.com\/blog\/real-estate-investing\/\" target=\"_blank\">invest for the long term<\/a>. Not only do you benefit from cash flow in the form of rent and additional payments such as <a href=\"https:\/\/www.petscreening.com\/solutions\/non-pet-owners\" target=\"_blank\" rel=\"noreferrer noopener\">pet policies<\/a>, but you also benefit from capital gains when the value of the property goes up.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Bonds<\/h4>\n\n\n\n<p>Bonds have become attractive since the Fed started raising interest rates to curb inflation. As the Fed ratchets up interest rates to drive down inflation, the yield on bonds will rise.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Gold<\/h4>\n\n\n\n<p>Gold is one of the best inflation hedges. As inflation soars and fiat money loses value, gold a.k.a real money gains value. Gold prices also seem to soar in times of uncertainty.<\/p>\n\n\n\n<p>Historically, the more uncertain people get about the future, the more they seek mediums that provide some degree of certainty. It&#8217;s human nature. We can\u2019t deal with uncertainty for an extended period of time.<\/p>\n\n\n\n<p>In uncertain times like this, commit some of your investment funds to gold. As fiat money loses value, gold will continue to rise in price. The relationship between fiat money and gold has always been inversely proportional.<\/p>\n\n\n<div class=\"fn_block block_fn_msg_box warning\"><div class=\"fn_block__icon\"><\/div>In the end, investments are not a sure bet and you can lose money investing in anything, even gold, so do your research before parting with your money.\u00a0<\/div>\n\n\n<h3 class=\"wp-block-heading\" id=\"i2_Cut_Down_On_Expenses\">2. Cut Down On Expenses<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Keep track of spending <\/h4>\n\n\n\n<p>Keeping track of your spending is a good way to prioritize your expenses: you can see where your money is going and whether needs are being prioritized over wants or vice versa.<\/p>\n\n\n\n<p>Every penny saved is a penny earned especially during inflation &#8211; that money will be more useful elsewhere.<\/p>\n\n\n\n<p>To make it easier to track your spending, prioritize your expenses in a budget that helps you focus on your needs.<\/p>\n\n\n\n<p>Keeping track of your spending will also help you keep on top of your payments so that you don&#8217;t have to pay extra charges and fees.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Buy the common items <\/h4>\n\n\n\n<p>\u201cLive below your means\u201d is banal yet effective advice to manage your personal finances, especially in a time of skyrocketing prices. Inflation dictates that you spend way below your means so that you have enough left over to save.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Use a fuel-efficient car <\/h4>\n\n\n\n<p>Gas prices have grown exponentially since 2020, and although prices have receded, they are still higher than pre-pandemic levels.<\/p>\n\n\n\n<p>If your car is not fuel efficient, consider using public transport or walking if your destination is within walking distance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"i3_Use_Debt_Responsibly\">3. Use Debt Responsibly<\/h3>\n\n\n\n<p>Inflation is a good time to exercise some self-control. Use your <a href=\"https:\/\/financer.com\/credit-cards\/\">credit cards<\/a> wisely and if possible, shop only with cash so you can keep track of what you are buying.<\/p>\n\n\n\n<p>Don\u2019t take a loan if it\u2019s not urgent. Rising interest rates mean borrowing money will be more expensive. Don\u2019t buy something you don\u2019t really need.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"i4_Stock_Up_on_Food\">4. Stock Up on Food<\/h3>\n\n\n\n<p>Buy the things you need and enjoy in bulk when the prices are favorable. If you find a place with great prices for something you need, stock up immediately.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"i5_Have_an_Emergency_Fund\">5. Have an Emergency Fund<\/h3>\n\n\n\n<p>An emergency fund is a safety net to fall back on in tough times. Make sure your emergency fund has enough to cover living expenses for up to three months without any income coming in. inflation does not stop emergencies from happening.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"To_Sum_It_Up\">To Sum It Up<\/h2>\n\n\n\n<p>While a moderate level of inflation is necessary for economic growth, skyrocketing inflation has the opposite effect. <\/p>\n\n\n\n<p>In the long run, it leads to an upward spiral of wages and prices and erodes the purchasing power of money.<\/p>\n\n\n\n<p>To curb inflation, the Fed has been raising interest rates to disincentivize spending and drive prices down. <\/p>\n\n\n\n<p>While this has had some effect on the inflation rate, it will take time to get back to pre-pandemic levels.<\/p>\n\n\n\n<p>In the meantime, you will have to hedge against inflation and brace up for a possible recession as economic activity recedes due to rising interest rates. <\/p>\n\n\n\n<p>The best way to hedge against inflation and brace up for a possible recession is to diversify your investment portfolio.<\/p>\n\n\n<div class=\"fn_block block_fn_button  buttons  is-flex is-flex-direction-column is-align-items-center\"><a href=\"https:\/\/financer.com\/credit-cards\/\" class=\"button  is-rounded is-primary is-large is-arrow\" target=\"_blank\"  >Compare the Best Credit Cards <\/a><\/div>\n\n<section class=\"fn_block quiz-section\">\n    <div class=\"container\">\n        <div class=\"quiz-section__wrapp page-content\">\n            <div class=\"container\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"quiz_header\">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"quiz_header_title\">\n\t\t\t\t\t\t\t\t\t\t\t\t<h3>How to Beat Inflation Quiz<\/h3>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"quiz_header_description\"><p>Test your knowledge<\/p><\/div>\n\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"quiz-question__start-button\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div 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disabled>Results<\/button>\n\t\t\t\t\t\t\t\t\t<\/div><div class=\"quiz-question__row\" id=\"quiz_question_0\"><div class=\"quiz-question__text\">What is the main reason for the Fed raising interest rates?<\/div><div id=\"answer0\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio0\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_0[]\" value=\"0\" \/><p>To increase economic activity<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer1\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio1\" class=\"radio\" data-is-true=\"true\" type=\"radio\" name=\"quiz-answers_0[]\" value=\"0\" \/><p>To lower inflation<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer2\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio2\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_0[]\" value=\"0\" \/><p>To encourage borrowing<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer3\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio3\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_0[]\" value=\"0\" \/><p>To decrease the value of money<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><\/div><div class=\"quiz-question__row\" id=\"quiz_question_1\"><div class=\"quiz-question__text\">What is the impact of rising inflation on the purchasing power of money?<\/div><div id=\"answer4\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio4\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_1[]\" value=\"0\" \/><p> It increases the purchasing power<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer5\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio5\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_1[]\" value=\"0\" \/><p>It has no effect on purchasing power<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer6\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio6\" class=\"radio\" data-is-true=\"true\" type=\"radio\" name=\"quiz-answers_1[]\" value=\"0\" \/><p> It decreases the purchasing power<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer7\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio7\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_1[]\" value=\"0\" \/><p> It stabilizes the purchasing power<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><\/div><div class=\"quiz-question__row\" id=\"quiz_question_2\"><div class=\"quiz-question__text\">Which of the following is NOT mentioned as a way to beat inflation and prepare for a recession?<\/div><div id=\"answer8\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio8\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_2[]\" value=\"0\" \/><p>Diversify your investment<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer9\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio9\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_2[]\" value=\"0\" \/><p>Cut down on expenses<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer10\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio10\" class=\"radio\" data-is-true=\"true\" type=\"radio\" name=\"quiz-answers_2[]\" value=\"0\" \/><p>Use debt irresponsibly<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer11\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio11\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_2[]\" value=\"0\" \/><p> Stock up on necessities<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><\/div><div class=\"quiz-question__row\" id=\"quiz_question_3\"><div class=\"quiz-question__text\">What is the purpose of having an emergency fund?<\/div><div id=\"answer12\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio12\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_3[]\" value=\"0\" \/><p>Gold loses value during inflation<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer13\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio13\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_3[]\" value=\"0\" \/><p>Gold and inflation have no relationship<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer14\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio14\" class=\"radio\" data-is-true=\"true\" type=\"radio\" name=\"quiz-answers_3[]\" value=\"0\" \/><p>Gold gains value during inflation<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer15\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio15\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_3[]\" value=\"0\" \/><p>Gold stabilizes during inflation<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><\/div><div class=\"quiz-question__row\" id=\"quiz_question_4\"><div class=\"quiz-question__text\">How does the article suggest cutting down on expenses during inflation?<\/div><div id=\"answer16\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio16\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_4[]\" value=\"0\" \/><p>Prioritizing wants over needs<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer17\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio17\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_4[]\" value=\"0\" \/><p> Using credit cards for all purchases<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer18\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio18\" class=\"radio\" data-is-true=\"true\" type=\"radio\" name=\"quiz-answers_4[]\" value=\"0\" \/><p>Buying common items in bulk<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><div id=\"answer19\" class=\"quiz-question__answer-container \"><div class=\"quiz-question__answer answer financer-field-group\"><label class=\"radio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t <input id=\"radio19\" class=\"radio\" data-is-true=\"false\" type=\"radio\" name=\"quiz-answers_4[]\" value=\"0\" \/><p>Taking out loans for unnecessary expenses<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t <\/label>\n\t\t\t\t\t\t\t\t\t\t\t <\/div><\/div><\/div><\/div><div class=\"quiz-results has-text-centered is-hidden\"><div class=\"quiz-result\">You answered <span data-js-correct-answer><\/span> out of <span data-js-all-answer>5<\/span> questions correctly!<span class=\"quiz-result-text\"><\/span><\/div><button class=\"button is-rounded is-primary is-hidden\" id=\"reset_btn\">Take the Quiz again<\/button><\/div><\/div><\/div>        <\/div>\n    <\/div>\n<\/section>\n\n\n<div class=\"fn_block block_fn_faq_list\"><h3 id=\"FAQs\">FAQs<\/h3><h4>Why is inflation so high in 2022? <\/h4><div class=\"faq_inner\"><span style=\"font-weight: 400;\">During the pandemic &#8211; when the economy was in lockdown &#8211; the government had to keep things afloat by printing money and pumping it into the economy. These \u201cmoney pumps\u201d came in the form of stimulus checks that were handed to households during the period of lockdown. This increased the money supply and led to a hike in prices. It is also the reason why stock, crypto, commodities, and real estate prices skyrocketed in 2021.\u00a0<\/span><\/div><h4>What is the best way to hedge against inflation?<\/h4><div class=\"faq_inner\"><span style=\"font-weight: 400;\">The best way to hedge against inflation is to diversify your investment portfolio. You will beat inflation if the returns from your investments exceed the inflation rate. Good investments to hedge against inflation include real estate, bonds, and gold.\u00a0<\/span><\/div><h4>Will there be a recession in 2023? <\/h4><div class=\"faq_inner\"><span style=\"font-weight: 400;\">The Fed has raised interest rates six times this year. Rising interest rates raise the cost of borrowing money for individuals and businesses. The more expensive borrowing money becomes, the less money will be borrowed. Since modern economies run on credit, less borrowing means a fall in economic activity which can lead to a recession. So a recession is possible in 2023.\u00a0<\/span><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>In October 2021, US inflation hit 6.2% &#8211; the highest rate since 2008. In January 2022, it rose to 7.5%\u2026 <\/p>\n","protected":false},"author":27398,"featured_media":51236,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"disable_branded_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ep_exclude_from_search":false,"footnotes":""},"categories":[16],"tags":[],"_links":{"self":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/posts\/36828"}],"collection":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/users\/27398"}],"replies":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/comments?post=36828"}],"version-history":[{"count":50,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/posts\/36828\/revisions"}],"predecessor-version":[{"id":77754,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/posts\/36828\/revisions\/77754"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media\/51236"}],"wp:attachment":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media?parent=36828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/categories?post=36828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/tags?post=36828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}