Regardless of the recession or not argument, the fact is that a lot of people are feeling financially crunched. Pretty much any place you may have put your money isn’t safe. Housing prices have plummetted, stocks have taken a pounding, and interest rates in savings accounts are practically non-existent.

Compounding the problem is the 3.9% inflation rate we’re facing in the United States right now. If you’re saving money in a bank, you will actually have less money in a year than you do right now. Considering that most traditional savings or money market accounts have interest rates somewhere around 0.2%, saving doesn’t seem like a good idea at the moment. Even online savings accounts can’t beat inflation at the moment; HSBC Direct currently offers the best rate at 3.45%…which you’ll note is still less than 3.9%.

If you can afford to buy some property right now, it’s a great time to buy due to depressed prices and low interest rates. Of course, most people can’t afford to buy property right now because they don’t have any savings. So how can you possibly grow your money in this harsh economic environment?

Stocks are currently the best option to protect and hopefully increase your money, and there are a couple of ways to do it. The first way is to just flat-out buy stocks. There are some good deals on good companies at the moment. You do need to do some research, and of course, nothing is guaranteed on the stock market. However, your goal isn’t to become rich (well, maybe ultimately, but not right now), your goal is to earn 4% or more on your investment in the next year to beat inflation. There’s a lot of information available from sites like Yahoo! Finance and The Motley Fool on what the best options are at the moment.

The second way is to tap into your company’s employee stock purchase plan (ESPP). ESPPs typically work by automatically deducting post-tax dollars from your paycheck and periodically buying company stock at a discount. The discount differs per company, but most of the companies I’ve worked at have been around 15%. If you can afford to participate in the ESPP, and then sell the shares as soon as they’re bought, you’ve just made a cool 15% or more on your investment. You will get taxed on those earnings, of course. But even if the government takes half you’re still left with a 7.5% return, which easily beats the inflation rate.

Now, you clearly can’t take all of your money and put it into stocks; that would just be foolish. You always need some cash on hand for emergencies or major purchases. I’ve read that you’re supposed to have the equivalent of 3-to-6 months take-home salary in the bank at all times to protect yourself from unforeseen expenses or possible job loss. Seems logical. But if you want to grow your money, you can’t just keep putting it into a savings account whose interest yield can’t keep up with inflation.

Note: I’m not a financial adviser so don’t take my advice as anything other than the whimsical musings of someone trying to figure out what to do with his money. I can’t make you rich. If I could, I’d start by making myself rich first.

Disclaimer: Any viewpoints and opinions expressed in this article are those of Nicholas C. Zakas and do not, in any way, reflect those of my employer, my colleagues, Wrox Publishing, O'Reilly Publishing, or anyone else. I speak only for myself, not for them.