How to Borrow During an Inflation

According to OECD.org, "Consumer prices (CPI) in the OECD rose by 9.2% year-on-year in April 2022, compared with 8.8% in March 2022... Food price inflation in the OECD continued to strongly pick up, reaching 11.5% in April 2022 compared with 10.0% in March." (OECD, 2022)

It's not news that food, gas, and other services have become increasingly expensive by the day since the beginning of 2022. However, there are ways to break through. In this blog post, I'll offer tips and ways to borrow without getting into excessive debt efficiently. Let's get right into it.

Before Borrowing:

Planning:

You should know why you need to borrow money at a time like this and how you intend to pay it back.

Examine your current responsibilities and estimate how much you need to survive during this time. Don't borrow for unnecessary things because it's money you must pay back with interest.

Research:

Once you come up with a realistic inflation plan, do your research. Find out what opportunities are suitable for you and your budget. There's no one size fits all. That goes for the information I'll be providing you in this blog post.

How to Borrow in an Inflation

State Involvement:

When borrowing, consider what your state is doing about inflation. For example, the state might cut income taxes.

To learn more about the current tax changes in your respective states, click here. You can also contact your company's HR department for help regarding available aid.

Another option is to research assistance programs in your state. These can also differ from one state to another. Find out what options can help your situation before going full-on into debt.

If you are borrowing due to a job loss, reach out to unemployment services to assist you financially and with a job.

Government Assitance:

Alongside State assistance, the government is also highly involved in helping families/borrowers navigate these challenging times.

According to recent remarks by U.S President Biden, "One of the key ways to fight inflation is by lowering the cost of moving goods through the supply chain." ( The White House, 2022). Moreover, his administration plans to lower prescription drug costs and other household expenses like high-speed internet.

Unfortunately, the government has fewer options for addressing inflation. However, there can be short and long-term benefits to their interventions.

Borrow from Relatives and Close friends:

The best borrowing option at a time like this, in my opinion, is reaching out to rich aunties and uncles. Reach out to reliable family and friends that will offer you the money for little to no interest. In fact, for free.

Make sure you are reliable and willing to meet your side of the agreement. If you are not dependable, it will be difficult for people to feel comfortable lending their hard-earned money.

Use Low-Interest Credit cards:

Using or switching to lower-interest credit cards can be a viable option for that high-interest debt you owe. Research so you don't jeopardize yourself or worsen your financial situation.

According to Bankrate.com, the Citi Diamond Preferred card is the best for a balance transfer. You'll need good to excellent credit to get this. (Zarrugh & Yarbrough, 2022)

Conclusion:

In this blog post, I discuss ways to borrow without going deeper into debt. Some ways you can do this are to research state and government assistance programs for free resources, borrow from friends and family members at lower to no extra charge, and use lower-interest credit cards.

Remember that before borrowing, have a plan for why you need to go into debt now, how much you need, and research for more options that suit your needs.

What other ways do you have for borrowing during inflation? Let me know in the comments!

Reference;

OECD. (2022). Consumer Prices, OECD- Update: 2 June 2022. https://www.oecd.org/newsroom/consumer-prices-oecd-updated-2-june-2022.htm#:~:text=Excluding%20food%20and%20energy%2C%20year,with%205.9%25%20in%20March%202022.

The White House. (2022). Remarks by President Biden on Inflation and Actions Taken to Lower Prices and Address Supply Chain Challenges. https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/06/10/remarks-by-president-biden-on-inflation-and-actions-taken-to-lower-prices-and-address-supply-chain-challenges/

Vemeer, T. & Funkhouser, S. (2022). State Tax Changes Effective January 1, 2022. Tax Foundation. https://taxfoundation.org/2022-state-tax-changes/

Zarrugh, N. & Yarbrough, G. (June 22, 2022). Citi® Diamond Preferred® Card review: Is it the “preferred” Citi balance transfer card?. Bankrate. https://www.bankrate.com/finance/credit-cards/reviews/citi-diamond-preferred-card/