While many people consider “inflation” a dirty word, its effects aren’t all bad. Yet knowing what to expect and how to protect yourself from the rising cost of goods and services is a smart strategy.

The main effects of inflation are better interest rates for savings accounts and higher costs of living, but, according to an article on gobankingrates.com, “there are several more nuanced effects to watch out for as you manage your money.”

In addition to better rates for savings accounts, positive effects of inflation include getting more for your money when you travel abroad, inflation offsets the negative effects of deflation (in which sluggish sales can weaken the economy), wages will be higher, and it’s likely to result in cost-of-living adjustments for recipients of Social Security.

Some of the negative effects of inflation are having to pay more for goods and services, borrowing money becomes costlier, adjustable-rate mortgage rates may rise, and long-term investments paying low interest result in less buying power.

Financial advisor and reporter Sarita Harbour writes on gobankingrates.com that the best way to weather any kind of inflation storm is to invest in a balanced portfolio that includes some portion of long-term capital investments, like equity stocks.

She also suggests protecting your money from inflation by investing in the following:

• Treasury Inflation-Protected Securities: “TIPS are bonds, but they are backed by the government and their return is linked to inflation through the CPI.”
• Annuities: “Talk to your insurance broker about these investments that often offer an income stream that increases over time.”
• Blue chip stocks: “These offer dividends and capital appreciation over the long-term.”

The U.S. Federal Reserve considers inflation rates of about two percent per year as healthy for the economy, and rates in that range are predicted for the next five years. And your personal economy can stay healthy too – if you know how to prepare.

And what about retirement? You should plan for inflation in retirement to protect your future purchasing power. One of the best things you can do is make sure you get the most out of Social Security, which has automatic cost-of-living adjustments built in. If you need help with Social Security, be sure to visit the SSA website.

Another thing you can do is to make yourself as self-sufficient as possible, so that inflation won't affect your daily costs as much. For instance, you can make your home as energy efficient as possible to reduce our energy costs, grow a garden to supplement your store-bought groceries, and plan on walking, biking or using public transportation, if at all possible. These things will cut down on gas, food, and maintenance costs, all of which have the possibility of rising or being variable.

Read the full article on gobankingrates.com and inflation rate projections on statista.com.