Inflation is something we either have never known…or remember from decades back. Take heart: few economists predict we'll return to the double-digit price increases of the late 1970s and early 1980s. The good news is that you CAN formulate a plan to deal with rising prices. Keep in mind that when prices rise, every dollar earned is worth less, making it even more challenging to make ends meet.
Can you still save money? Saving for the future can take a back seat during inflation; even after prices stabilize inflation can put families behind in their savings goals. To preserve wealth and buying power, a careful strategy is often needed.
Here are some valuable tips to get you started:
- Put an end to those nuisance fees once and for all.
- With every dollar stretched to the limit, you don't want to waste money. Now may be the time to get rid of any monthly bank service fees, ATM charges and other costs that may take a chunk of your income each month. Take a look at your checking account and see what kind of fees you are charged. Tower offers FREE Checking with value-added incentives and over 30,000 free ATMs nationwide.
- Make an effort to not waste food.
- The only thing worse than spending more at the grocery store is watching those dollars disappear into the trash or down the garbage disposal. With inflation on the rise, it has never been more essential to limit food waste. Embrace those leftovers, freeze the excess, or share the extra with those in need. Plan meals and leftovers carefully so you're not tossing food out each week. This will also help you avoid the temptation of getting take-out for either lunch or dinner. Consider shopping at warehouse stores if it makes sense for your family.
- Stock up on pantry goods and other staples.
- Even with prices on the rise, there are bargains to be had. When deals pop up, stock up on items you know you will use that have a long shelf-life, like soups, pastas and other canned goods. Filling the pantry with pasta boxes, jarred sauce, and canned vegetables will be good for future finances, so clear some space and start shopping. You may also want to stock up on meat, poultry, eggs, dairy products and fresh fruits and vegetables when those go on sale. Buying on sale is a smart consumer move in any economy, and the Department of Agriculture recently predicted prices of those foods will continue to rise this year. Consider buying generic or store brands over name-brand ones; the ingredients are often the same.
- Experiment with meatless meals.
- With the price of meat rising faster than other grocery store staples, this might be a great time to embrace your inner vegetarian. Maybe a meatless Monday is a way to experiment. Of course, giving up meat entirely isn't necessary, but eating meatless one or two days a week could make a big difference in the size of monthly grocery bills. Beans are a cheaper, healthier alternative.
- Put off major purchases.
- If you are contemplating a major purchase, ask yourself if it is something you can live without. If so, putting it off until the worst of the inflation spike is over might result in considerable savings.
- Seek out inflation friendly investments.
- If extra cash is available to save and invest, looking for products that benefit from inflation is smart. From government savings bonds that track the rate of inflation to stocks of companies with rising earnings, these smart money investments could be suitable for the short- and long-term. Consult a financial advisor to help explore your options.
- Optimize your fuel economy.
- The price of gas has gone up a lot lately, and inflation at the pump is surely one of the most painful aspects of rising prices. Filling up your tank may have cost $40 a year ago, but you can double that number now. Looking for ways to maximize fuel economy can have an outsized influence in this environment. Think about the way you drive as well as how many miles are traveled. Are there other, less expensive transportation options available?
Inflation is nothing new, and rising prices have arisen in decades past. When prices are rising, it is easy to despair, but it is important to realize that spending power can be retained. Solving the Federal Reserve dilemma or controlling the larger economy might not be an option, but the ability to make strategic changes to how you shop, drive, cook and live your daily life still exists. The inflation-fighting tips listed above may help make the most of those shrinking dollars.
Resources: The Balance, Nerdwallet.com
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