Americans Are Spending $445 More a Month Than a Year Ago – How Can You Trim the Bills?

Bills pilling up and no money to pay them stock photo
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With the consumer price index rising 0.4% from August to September and the overall all-items index increasing 8.2% year-over-year in September, it should come as no surprise that Americans are spending more per month than they did a year ago. But how much more?

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As CNBC reports, persistent high inflation and consumer prices are responsible for the typical U.S. household spending $445 a month more to purchase the same goods and services they did a year ago, according to financial consulting and research authority Moody’s Analytics.

Adding to the fiscal despair is the relative decrease in seasonally adjusted real average hourly earnings for September, which fell 3% over the past 12 months, per the U.S. Bureau of Labor Statistics.

Everyone’s personal inflation rate varies depending on what they buy and where they live, but the financial struggle is being felt throughout the country. “Inflation is affecting people very, very differently,” Moody’s lead economist Ryan Sweet told CNBC. “But everyone is feeling the effect.”

Indexed food prices are the highest they have been since the early 1970s across the board, so grocery shoppers have little recourse besides better budgeting and looking for cheaper alternatives. But even doing these and changing up other spending habits could save you much-needed money every month.

Make Your Money Work for You

As CNBC reports, cutting out unnecessary expenses should be a top priority for anyone wanting to keep their spending tight. Separating fixed from discretionary expenses is critical, according to Madeline Maloon, a financial advisor with San Ramon.

Fixed expenses — food, rent or mortgage, insurance and transportation — have to be paid, so identifying the non-essential spending you can do without, like vacations or dining out, will help you cut down your monthly cost of living, Maloon says.

Reassessing planned discretionary purchases and dispensable “money drains” like automatic monthly subscriptions and unused gym memberships will help with budgeting, but there are ways to whittle down fixed expenses like food too.

According to The Balance, getting creative with trimming your food and personal care spending will help with reducing your monthly spending. There is a reason discount and bulk grocery stores are so popular, and it has more to do with name-brand mark-ups than inferior products. Looking for less expensive shops and products will make your money last longer.

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Make Your Money Work for You

And lastly, it should go without saying, but try to avoid the trap of using credit cards or taking out a loan or money from your retirement savings. As certified financial planner Joseph Bert told CNBC, “That’s the worst thing you can do. You’ll pay a huge price for that in years to come.”

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Make Your Money Work for You

About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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