When you have a budget, you can figure out how much money you have to spend for specific categories of expenses, such as entertainment or clothing. From there, you can more easily decide how specifically you’re going to spend that money each month. Your budget also allows you to find out how you can shuffle things around to add some money to categories where you’re going to spend more when inflation hits. For example, you might need to allocate more money to groceries or fuel costs.
For example, you might be subscribing to services that you don’t really use or can do without. Canceling those subscriptions is typically fairly easy and the savings add up. You might also have duplicate expenses that you can eliminate. For example, if both you and your partner have separate gym memberships, you might be able to save by switching to a single joint or family membership. If you own a business, find ways to cut expenses there as well. For example, you might be able to decrease your shipping costs by ordering products in greater quantities. [5] X Research source
If you own your home, you might consider renting out a spare bedroom to get a little extra cash. You could also look into short-term rentals through a platform such as Airbnb.
For example, you might say, “I’ve been with you for 5 years. Is there anything we can do about the amount I’m paying for your service? I noticed your introductory rate is $50 less than what I’m currently paying. " Explore other options before you call so you know what competitors are charging for the same service. Many companies are willing to match a competitor’s rate to keep from losing you as a customer—and if they’re not, you can always consider actually switching to the other company. If talking to customer service reps on the phone makes you anxious, you might want to sign up with one of the apps, such as Truebill or Copilot, that negotiate for you. They typically charge a percentage of the amount they save you as a fee, but you’ll still come out on top and you don’t have to spend all that time on the phone.
For example, the Target app has hundreds of offers and coupons available—all you have to do is activate them, then let the cashier scan the code on your phone at checkout. While mobile apps are great for brick-and-mortar shopping, browser extensions, such as Honey, can also help you save money on your online purchases. Discount apps, such as Groupon, also frequently offer deals on restaurants and entertainment so you can still go out and have a good time.
This doesn’t mean that you need to hoard supplies. As long as you have enough to last your household a couple of weeks (or a month at most), you’ll be fine. Panic buying causes its own problems and forces other people to do without.
For example, you might sign up to take surveys or complete small research tasks. If you have a particular skill or area of expertise, you might be able to make a little extra money from that as well. Through platforms such as Fiverr or TaskRabbit, you can do small tasks for other people. You can also bring in extra money by having a yard sale or monetizing a hobby, such as selling crafts or baked goods. It’s not necessarily a great time to start a side hustle that’s also going to cost you money. For example, while you could earn a little extra cash driving for a ride-share service, the rising cost of fuel is going to eat away at your profit.
Because interest rates go up when inflation rises, a car loan or credit card payment will end up costing you more. This means you’ll end up spending even more if you need to finance your purchase. [12] X Research source On the other hand, if there’s a big-ticket item you need—an old appliance that needs to be replaced or a car on its last legs—go ahead and do that now. Prices will continue to rise, so you’ll ultimately save a little money. Shop around so you can get the most bang for your buck. You might be able to find a lightly used or refurbished older model for a fraction of the price of a new one. [13] X Expert Source Trent Larsen, CFP®Certified Financial Planner Expert Interview. 22 July 2020.
For example, if you work all day 5 days a week, you could program your thermostat to roll back as much as 7 to 10 °F (−14 to −12 °C) while you’re away at work, then automatically return to a more comfortable temperature while you’re at home.
For example, instead of running out to do a single errand several times a week, you might make one trip each week and do all your errands at once. Shop around when you need to buy fuel as well—the most convenient fuel stations aren’t always the cheapest.
Many online banks offer other budgeting tools that can help you manage your money better—all from the convenience of your smartphone. If you’re interested in an online bank, shop around and compare them to find the one that seems like it’ll best suit your needs. Then open an account and try it out for a little while. You don’t necessarily have to switch all of your money over to it right away.
For example, many banks and credit unions offer checking accounts that pay at least 3% interest on up to $10,000. CD (certificate of deposit) rates are generally pretty low, but you might still be able to find one that’s higher than your current savings account. The problem with a CD is that you’ll pay fees if you withdraw your money early, so don’t use this option for all of your savings. Buying savings bonds is another option. You can’t redeem them within 12 months of the date they’re issued, though, so make sure the money you invest in them is money you won’t need for the next year.
As long as you have a fixed-rate mortgage, your mortgage payment will stay the same year after year—unlike rent, which keeps going up and up every year regardless of inflation. This keeps a big portion of your household expenses under control. [20] X Research source If you get in a tight spot, you can also borrow against the equity in your home—something you can’t do if you rent.
Be upfront with your customers about why your prices are going up—they’ll appreciate your transparency. You might also recommend ways they can help the community’s economy, such as by buying locally and using small businesses instead of large corporations and chains. If you don’t already have a loyalty program, you might consider starting one. Offering discounts to repeat customers will help offset some of the price increase if people continue to shop with you. [22] X Research source
Discuss your investment goals with your investment advisor. They can help you choose the best investments that will help you control against inflation. Equities (stocks in companies) are also a great hedge against inflation. As those companies raise their prices, the stock price will rise as well. Focus on companies that produce goods and services that people always need, like utilities and healthcare. Limit your ownership of entertainment and retail companies. As inflation rises, consumers will naturally limit their spending in these categories, which can cause the prices of these stocks to fall.
Discuss your investment goals with your investment advisor. They can help you choose the best investments that will help you control against inflation. Equities (stocks in companies) are also a great hedge against inflation. As those companies raise their prices, the stock price will rise as well. Focus on companies that produce goods and services that people always need, like utilities and healthcare. Limit your ownership of entertainment and retail companies. As inflation rises, consumers will naturally limit their spending in these categories, which can cause the prices of these stocks to fall.
Talk to your investment advisor before investing in gold or commodities or if you already have gold or commodities in your portfolio. Commodities that are necessary, such as oil and staple foods, can be good investments during inflation. However, keep in mind that these products can also fall victim to shortages and supply chain issues that typically accompany inflation. [25] X Research source
