Creating An 'Inflation' Shield Things are not as bad as they were 30 years ago, says our personal finance expert. Making sure your house is energy-efficient and shopping smarter are two ways to defend against recession and inflation, she says.
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Creating An 'Inflation' Shield

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Creating An 'Inflation' Shield

Creating An 'Inflation' Shield

Creating An 'Inflation' Shield

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Things are not as bad as they were 30 years ago, says our personal finance expert. Making sure your house is energy-efficient and shopping smarter are two ways to defend against recession and inflation, she says.

ALEX CHADWICK, host:

Bare market, recession, inflation, these are money terms that still confuse a lot of us and remind others of the economic climate when Jimmy Carter was president. When my co-host, Madeleine Brand spoke earlier with Day To Day's personal finance contributor, Michelle Singletary. Michelle said that actually, things are not as bad now as they were 30 years ago.

MICHELLE SINGLETARY: But it's still troublesome. When I want to tell people is that, you know, all year we've been focusing on the recession and there are definitely things you should do in that case. But now you've got to worry about how to handle your money in an inflationary time?

MADELEINE BRAND, host:

So, what is the best way to do that?

SINGLETARY: Well, you know...

(Soundbite of laughter)

BRAND: I know what you're going to say.

SINGLETARY: You know what I'm going to say and it's like I sound like a broken record, but people are not doing it. You know one thing we can do is make sure your house is energy-efficient. You've got to hoard as much money as possible to account for rising prices, which is what happens with inflation. So, go through your house. Turn down the air-conditioner. Turn off the lights. Listen, my kids were famous for leaving the lights once, until I started charging them a dollar.

BRAND: You charged your kids a dollar?

SINGLETARY: You better believe it. They leave a...

BRAND: Every time they leave the light on.

SINGLETARY: Every single time that you leave the light on, you owe me a dollar.

(Soundbite of laughter)

BRAND: Well, that when we do - reduce your bill, I guess.

SINGLETARY: And you know, they started become very energy-efficient when they started to owe mama some money.

(Soundbite of laughter)

BRAND: I bet.

SINGLETARY: You know, shop smarter. Look for products that are going to save you money. And here's the other thing, bend down when you go to the grocery store, because the cheaper products are on the lower shelves.

BRAND: What if you have a family that is doing all that and yet, still is having trouble?

SINGLETARY: Then you need to look at how you're living your life. You may have to reduce yourself to one car. You may have to get a second job. Every single budget that I looked at, the cell phone and utilities were just out of whack. I mean, people with 100- and 200-dollar cell phone bills. Who are you talking to? Get a prepaid phone. I mean, these are hard times and the kind of luxuries that we have become used to, that we think are necessities, are not going to be necessities in an inflationary period.

BRAND: Well, that - you raise a good point and that is there are probably lots and lots of things that we take for granted now that really - when we look at it a second, third time, we could do without. What are some other things besides cell phones?

SINGLETARY: You know, you go to the standard cable reduce, and I not saying get rid of it completely but go back to basic cable. You may have to go back to a one car and figure out how you can commute with your husband or you know, combine trips and things like that, using public transportation. I mean, whether we're in a recession or headed towards you know, inflation, maybe not double digits but certainly, enough that it's going to cut people's budget. You've got to be drastic and we've got to go back to some ways that were smarter in terms of how we use our money.

BRAND: What are your feelings on going to regular supermarket stores versus going to some of these big warehouse clubs like Cosco?

SINGLETARY: I think you have to be very careful about buying in bulk. In some instances, it's absolutely saves you money by the unit price. But a lot of times, people waste when they buy in bulk. Just dishwashing liquid, for example, you put that big bottles out there, people use it liberally. So what I did was I bought a little teeny bottle and then I would put liquid in there so that my kids and my husband will always think that we're about to run out.

(Soundbite of laughter)

SINGLETARY: And it is the same thing with coupons. If you buy the store brand, you could still save money without using that coupon. Sit down, look at the coupons. Look at what you're saving and make sure that you are actually saving.

BRAND: Michelle Singletary is Day To Day's personal finance contributor. She writes the Color of Money column for the Washington Post. Michelle, thank you.

SINGLETARY: You're welcome.

CHADWICK: And Madeleine Brand, thank you for that interview.

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