How To Fight Inflation as a Single-Income Earner
If you have only one income to support your family — or even just yourself — three key areas require your attention if you want to survive the current era of supercharged inflation: gas, food and investments.
You can’t control the economy or even keep tabs on all the ways that life is getting more expensive, but if you can tamp down costs in those three critical categories, you’ll emerge in better financial shape when the economic dust settles and prices finally fall back down to earth.
Nowhere is the impact of inflation more evident than at the pump — and if you’re getting by on just one income, you have to find ways to get more out of every gallon.
“One way to save money on gas is to pay for it with cash instead of debit or credit,” said Sherrie Ashley, CFP and chief financial planning strategist at PeopleFastFind. “The practice of charging less for customers paying cash varies from gas station to station, but it can be very common in some cities. In my local area of Oakland, Calif., almost every gas station charges 10 cents less for customers paying cash. In Los Angeles, several gas stations offer 20-cent discounts on gas, especially for premium.”
That 10- or 20-cent difference can quickly add up.
“You will save $1.50 to $2 every time you completely fill a 15-gallon tank,” Ashley said. “Or $72 to $144 a year at the average consumption of 60 gallons per month.”
Other gas-saving tips from the U.S. Department of Energy include:
- Slow down and drive sensibly. Excessive speed and aggressive driving burn more gas.
- Remove excess weight.
- Don’t drive with cargo on the roof.
- Roll down the windows at low speeds and use air conditioning at high speeds. On the highway, increased drag on open windows burns more gas than your air conditioner.
Strategize at the Supermarket
With the exception of maybe the gas station, prices are rising faster at the grocery store than just about anywhere else. So whether you’re shopping for just yourself or an entire household, if you’re working with only one income, you have to find ways to say when you’re buying food.
“Write out a list before you go and stick to purchasing only what’s on that list,” said Danielle Wolter, a former CPA and current president of The Million Dollar Mama. “In addition, creating a weekly meal will help you determine what groceries you need to buy and keep you on task. It also allows you to create a plan that incorporates store sales on products.”
So, stick to a meal plan and shop according to that plan — but that plan can be a whole lot more or less expensive depending on the ingredients.
“First, freeze your own meat instead of buying it fresh,” said Jamie Knight, CEO of business and market intelligence firm Dat Source Hub. “You’ll save a lot of money and the quality isn’t any worse. Second, bulk up on staples like pasta, rice, and beans. These will last for months and can be used in a wide variety of meals — they’re also cheap. Finally, if you’re really tight on cash, don’t buy produce that spoils easily like bananas or avocados. These are wasteful purchases that will only waste food you could otherwise have eaten later.”
Adjust Your Game Plan for Saving and Investing
If you’re a single-income earner who is watching the contents of your brokerage account or crypto wallet shrink with each new trading session, it might be time to pivot to a class of investments that were designed for trying times like these:
- TIPS: As the name implies, Treasury Inflation-Protected Securities were designed to help investors of all income levels cope with rising prices. When you buy TIPS, the principal increases and decreases with the rate of inflation. When they mature, you receive either the original principal or the adjusted principal, whichever is more, so you win either way. They’re sold in terms of five, 10 and 30 years, but you can sell them before they reach maturity as long as you hold them for 45 days. They’re sold in $100 increments, and you can buy them through your broker or TreasuryDirect.
- Series I savings bonds: I bonds are great for single-income earners because each individual is limited to a maximum of $10,000 per year no matter their income situation. They’re among the best investments anyone can make right now because, like TIPS, they’re designed to protect savings from inflation by combining a fixed rate with a variable inflation rate. If you buy from now through October, you’ll lock in an enviable rate of 9.62%. A guaranteed return that outpaces inflation is almost unheard of in today’s economy, which is precisely why I bonds are selling at a record pace. If your household has only one income stream, you need to protect every unspent dollar, and few savings vehicles offer more protection than I bonds.
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