Inflation is a major challenge to personal finances. When prices go up, it reduces a consumer’s buying power. Every dollar is worth less, resulting in stressed budgets — and people.
If you are struggling with the impact inflation is having on your finances, these tips may help:
- Minimize fees and interest. Look for ways to cut back on service fees, particularly at your bank. Plan ahead so you are only using an ATM at your financial institution. Determine what terms you need to meet (such as maintaining a minimum balance) to avoid service fees on your accounts. Cut back on your use of credit cards or pay your balance in full each month to avoid interest charges.
- Eliminate food waste. The only thing worse than paying higher prices at the grocery store is letting the food you’ve purchased go to waste. Plan ahead so you only buy what you will use in a given week. Stretch your food budget by making large batches of favorite meals that you can save as single-serve portions for later.
- Hold off on major purchases. Consider if you can live without that big ticket item for a bit longer. Inflationary patches are often cyclical, and some costs may come down after pandemic-related supply chain issues have improved. If you can, save a small amount each month toward the purchase so that you don’t have to rely on credit or can make a big down payment when you do finally buy.
- Reevaluate savings and other investments. Review your savings vehicles and divert cash toward products that benefit from inflation. Talk to your financial advisor or use the LifeMatters Financial Consultation Service to identify effective ways to minimize inflationary losses.
- Maximize fuel economy. High gas prices are one of the hardest things to manage during a time of inflation. Consider if there are alternate ways to get where you need to go. Can you walk, bike, or use public transportation more often? Can you combine errands? Would flying to your summer vacation destination be cheaper than driving to it?
Inflation is frustrating, but it often subsides when the economic conditions responsible for it have changed. Making smart changes to how you shop, drive, cook, and invest will help you stretch your dollar further, both now and into the future.