It’s no secret that inflation is on the rise. Higher prices at the gas pump, grocery store, and more can really put a strain on your family’s finances. While you can’t control rising prices, you can adjust your financial plan. Read on for our tips on how to deal with inflation.
Review Your Budget
Have you reviewed your budget lately? If not, it might be time to take a look. Basic necessities are more expensive than before, and prices aren’t likely to fall anytime soon. The USDA estimates that the price of groceries will increase by up to 8% in 2022. Gas prices are at an all-time high and still rising, too.
Your budget should reflect these changing costs. Make sure you’re allocating more money for necessities like gas and groceries. This might mean cutting back in other areas like entertainment and travel.
Rethink Your Shopping List
Now is a great time to rethink your shopping list and cut back on items that are unusually expensive. For example, beef prices are rising rapidly, while the price of vegetables has hardly budged. If you\’re looking for a way to lower the grocery bill, going meatless one or two days a week can help your bottom line more than ever.
If you’re not ready to change your diet, consider switching up the brands you buy. Try purchasing generic or store-brand items instead of the pricier brand names. According to Consumer Reports, you’ll save an average of 25%. That’s more than enough to deal with inflation.
Put Off Car Buying
You can’t exactly stop buying groceries or gas, but you can avoid another category where inflation is skyrocketing; buying a car. The cost of both new and used vehicles is rising rapidly. Waiting to purchase your next vehicle might help you deal with inflation and save you thousands of dollars.
When you do select a new vehicle, keep gas mileage in mind. Many new vehicles are more fuel-efficient than previous models. Hybrid and electric cars are more affordable than ever before. With rising gas prices, a more fuel-efficient car can make a big difference to your monthly budget.
Keep Growing Your Savings
While paying for the things you need today has changed drastically, it’s still important to increase your savings! The general rule of thumb is to have three to six months of living expenses set aside in an emergency fund to cover unforeseen circumstances such as a job loss, health issue, or a home or car repair.
If you don’t currently have an emergency savings fund, start now! Even if you can only afford to set aside a small amount each month, your savings will really add up over time.
Make It A Teachable Moment
It’s important to talk with your kids about inflation. They’re never too young to start learning about their world and how to navigate changes in a budget and spending choices. The next time you head to the grocery store, pick out a few of their favorite foods and note their prices. Keep doing this over the next few visits to the store and note the changes. Another idea is to point out gas prices every time you drive by a fuel station. Seeing these changes will help your kids understand how prices rise and fall.
Inflation can make you feel anxious, but with the right tools, you can keep your spending under control and stay on track. At NuMoola, we encourage you to use relatable and teachable moments to build lifelong positive money habits for you and your family!