Inflation is slowing down — thankfully — but prices are still creeping up on certain items, making it harder to get by on the same paycheck. While there’s nothing you can do about inflated prices, there are things you can control to make life more affordable and help your paycheck stretch further.
Use Inflation to Your Advantage
Higher prices and interest rates on loans are both major downsides to inflation, but on the upside, savings rates are abnormally high right now.
“Make sure your emergency fund is in a high-yield savings account to help you make money,” said Barbara Ginty, CFP and host of the “Future Rich” podcast. “One benefit of inflation is it has caused interest rates to go up, so now we have decent rates on high-yield savings accounts!”
David Bach, author of “The Automatic Millionaire,” recommends putting funds into a money market account.
“This is the best time to get a good return on your cash again in nearly 20 years,” he said. “We are back to money markets paying over 4% to 5% and that is simply incredible, so make sure your cash at the bank is making money — or move it!”
Create a Zero-Based Budget
If you’re not already budgeting, now is the time to start.
“Create and follow a zero-based budget, which [means] your income minus expenses — including giving and saving — equals zero,” said Rachel Cruze, author of “Know Yourself, Know Your Money.” “A lot of people say they are on a budget, but aren’t actually tracking it. Once you’re on a budget, you can focus on your four walls first — shelter, food, utilities and transportation. Then, start looking at where you can find margin.”
Eat at Home More and at Restaurants Less
Dining out and ordering takeout can take a serious hit to a budget that’s already stretched thin. That’s why Julien and Kiersten Saunders, founders of the Rich & Regular blog and authors of “Cashing Out,” recommend cooking more at home — and if you don’t know how to cook, learn how.
“Learning how to cook well at home is a huge help in fighting inflation,” they said. “Specifically, learning how to cross-utilize ingredients, freezing foods and vacuum-sealing foods helps to minimize waste and reduce the amount of money spent on food.”
Don’t Buy More Than You Need
If you have a tendency to buy things you don’t need or stock up on extra items “just in case,” this could easily be eating away at your paycheck.
“[My best tip for] managing inflation is buying what you need and not buying more than you need,” said Marcus Lemonis, former host of “The Profit” and “Streets of Dreams.” “I think too often as a society, we tend to be gluttonous in our consumption. Inflation is something that obviously affects commodities that we have to have, like food and fuel and lodging and things like that. You have to be willing to be conservative and be intelligent about it. You’re never going to be able to drive down the price of something, but you are going to be able to determine what things you need and what things you don’t need, and if you need them, how much of them you consume.”
If you’re able to create some wiggle room in your budget, invest anything that you can.
“[The best way to fight the impacts of inflation] is to outpace it by investing,” said Tiffany “The Budgetnista” Aliche, author of “Get Good With Money.” “Your money has to make more than what inflation is costing you.”
Look For Ways To Increase Your Income
Making more money might be your best solution for fighting inflation — and there are several ways you can do this.
“Get creative to earn more income,” said Bola Sokunbi, founder and CEO of Clever Girl Finance.
Some ways that Sokunbi recommends include picking up a part-time job, finding a better-paying job, selling items around your home or starting a side hustle.
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