Consumers across the nation are paying more for most goods and services these days. According to the US Bureau of Labor Statistics, the Consumer Price Index, which measures the average change in consumer goods prices is higher than it’s been in more than 30 years. You’ve probably noticed that your weekly grocery bill has increased this past year — to the tune of 7 percent, while the cost to heat your home or fill up your car rose by 27 percent.
The main driver behind price hikes? If you guessed it’s pandemic-related, you would be correct. Shortages of both raw materials and labor have created production slowdowns and supply-chain bottlenecks. The good news is rising prices won’t last forever. The Federal Reserve (the central bank that manages US monetary policy) has reported it will begin cutting back the extra financial help it gave the economy during the pandemic. This action would slow the price increases that are hitting consumers hard.
What can you do to avoid going into debt or dipping into savings to cover living expenses? Below we list some tried and true money-saving strategies to help you weather the inflation storm. Read on to discover six ways to protect your wallet from inflation.
Create or Update a Budget
You may already have a budget in place — and if so, kudos to you. However, it may be time to take a fresh look at how you’re currently allocating available funds if you want to stretch them even further during these times of high inflation. If you don’t yet have budget in place, it’s a good time to start. The first step is to track everything – every single thing — you spend money on each month. Logging every bill that comes in, receipt for goods bought, or cash outlay made will give you a full account of your spending habits.
This gives you control over your finances, which can be incredibly empowering in the midst of pandemic- and inflation-related chaos. Looking at the big picture on your financial status also allows you to identify where you can make cuts. If you have money left over after you’ve taken care of the non-negotiable monthly expenditures like rent or mortgage, utilities, and groceries, put the rest in savings or payoff debt so you can have lower monthly expenses. When inflation eventually levels off, you can have the occasional splurge with any disposable income, but for now, try to hang on to every cent you can while we weather this storm.
Increase Your Income if Possible
One of the greatest challenges with inflation and higher prices is that incomes don’t rise accordingly. If you’ve reduced your spending — you’re eating out less and forgoing your daily latte, but your outgoing expenses still add up to more than what you’re bringing in. To stay in the black and out of the red, you may be interested in looking at ways to ways to earn a little more cash.
Finding ways to increase your income can make periods of extended inflation easier to get through and budget for. The gig economy is thriving and there are solutions out there to match every skill and talent you may have. Some of the possibilities for increasing income might include:
- Sell your old stuff — online, garage sales, classifieds
- Negotiate a pay increase with your current employer
- Explore job opportunities with higher compensation
- Rent out a room in your home
- Consider a part-time or second job
- Offer childcare, dog walking, or house cleaning services
- Sell art, jewelry, other handmade items on Etsy
- Become a virtual assistant or customer service rep
Thankfully we are living during a time that the opportunities to create or supplement income both online and in-person has been growing tremendously. There might be something new that peaks your interest. Which one would you try?
Dig Up Discounts
Chances are, you’re paying more than you need to for everyday items. If you’re willing to do the research, you’ll find hundreds of ways to cut your costs on everything from food to internet services to insurance premiums. If you shop online (and who doesn’t since COVID) rebates and discounts abound. Check out some of the many cash-back sites like Rakuten or Dosh that partner with stores to give members a percentage back on money spent on qualifying purchases.
CapitalOne shopping lets you compare the price of products and gives you the lowest price found when you buy through them. All you have to do is install an extension on your browser or download an app. This is hands down one of the most passive and easy ways to save on necessary purchases.
You can often get rate reductions on internet and cell phone services. Call your provider and ask about lowering your rates or switching you to a less expensive plan. If they don’t seem ready to play ball, you can always tell them you’re going to find lower rates elsewhere. Sometimes that will help the representative find you a cheaper option, but if not, you need to be prepared to cancel your account and find another provider.
Your personal insurance coverage is another place to save money. If you're comfortable with the possibility of paying more out of your pocket if you're in an accident, consider increasing your deducitble as a way to keep your monthly expenses low. On the home front, if you install safety features in your place —whether you rent or own – you’ll qualify for discounts. There are many ways to cut your insurance rates. The best way to find out is to call a helpful Wawanesa agent who can help you get the best coverage for your situation and apply all the discounts you qualify for.
Eliminate Unnecessary Subscriptions and Memberships
If you don’t use your gym membership, this is the first and easiest place to stop spending needlessly. Even if you do go to the gym, you could take your workout into the great (free) outdoors. Monthly payments to services like Amazon Prime, Spotify, Blue Apron, and Stitch Fix may seem inexpensive when you sign up, but if you multiply the monthly cost by 12, it can add up fast. Even worse is when you don’t use the product or service anymore, yet you keep paying for it via automatic payments. Paying for unread magazines and newspapers? Your local public library can keep you informed and up-to-date for free and many offer books and services online.
Benefits of canceling subscriptions:
- Save hundreds of dollars per year
- Enjoy fresh air and sunshine
- Guilt-free reading and listening
Spend Less on Gas
One of the first signs of inflation will be higher prices at the pump. There are many ways to reduce your gas-buying costs. Some include driving less by using alternative methods of transportation. Do you have a good public transportation system where you live? Perhaps you could rideshare or walk or bike to get around.
If you have no choice but to drive (or you simply refuse to give it up), once again, technology is your friend. Smartphone apps like GasBuddy make it easy for you to check the lowest fuel prices in your area. They’ll also tell you when the best times to fill up are.
Pro-tip: Buy gas near the beginning or middle of the week to save money. Gas prices tend to go up at the end of the week and through the weekend.
Another way to maximize your gas purchases: sign up for fuel rewards. Many gas station networks offer rewards programs to help you save money at the pump. Some companies even offer credit cards that reward you with extra points on fuel purchases.
Shop Smarter at the Grocery Store
The price of groceries seems like its increasing from week-to-week. Feeding your family isn’t something you can skip out on, so it’s important to find ways to budget wisely for groceries when prices are rising.
Here are some money-saving tips to help you manage your grocery budget:
- Swap out brand-name items for generic store brands.
- Hit up the local grocery bargain stores first. They may not have everything you need but often the items they do have are sold at a discount, so stop there first.
- Avoid stores or sections of a store that tempt you with non-grocery purchases like clothing, electronics, and any other retail therapy that can hurt your pocketbook!
- Make a list to avoid impulse buys at the store.
- Buying in bulk doesn’t always means saving. Be sure to use a calculator to see if the purchase really means a lower unit price.
- Incorporate some meatless meals into your meal planning.
- Get creative in your kitchen with items you already have on hand.
- If your grocery store charges for grocery bags be sure to bring along your reusable totes for an added savings.
- Clip digital and printed coupons! Grocery stores usually send out weekly sales flyers that often still have coupons or announce what items will be on sale and when.
- Take advantage of store rewards programs, some will even offer a fuel discount at select gas stations as a reward for your purchases.
- Shop local farmers markets if that’s an option where you live.
- Incorporate more low-cost staple items into your meals, such as pasta or rice.
You can also use money-saving rebate apps to reduce your grocery spending. With Ibotta, for example, you can earn cash back on grocery purchases at select stores. This can be a simple way to combat inflation and higher prices at the supermarket.
The six strategies outlined here will get you off to a good start, but there are many more ways to protect your wallet during times of high inflation. Once you start using these techniques and others, you may find it becomes second nature to make and save cash. Your bank account will thrive, your debts will be paid off, and you’ll have the security of knowing that your finances are less impacted by inflation!
Tracking your expenses is a great way to have more control over your financial situation. We've put together a simple budget tracker so you easily keep track of your spending habits and plan for major expenses.
