If you have felt the financial pinch over the past few years, you are not alone! The cost of living has significantly increased nationwide, making it challenging for Americans to make ends meet. You have probably become a master of making the most of your paycheck, but as the cost of everyday items rises, this gets even harder to maintain.
You may have noticed the inflationary changes at the gas pump, which affect our ability to run errands, get to work, and travel on our days off. However, inflation can be found everywhere, including at grocery stores, restaurants, entertainment places, and even on utility bills. Electricity, water, and gas bills have significantly increased over the past few years, and prices for grocery basics like milk and eggs are rising faster than they have in decades, making financial stability increasingly difficult for most Americans.
The increasing inflation costs may seem impossible to avoid, but there are some ways you can combat their effects on daily living. We’ve listed below seven helpful tips for navigating inflation. Also, remember that personal finance is unique to everyone so find the tips that will best help your current scenario.
1. Create a Budget or Revisit Your Already-Created Budget
The first step in money management is analyzing your spending habits by reviewing your previous month’s bank statements. Some people access this through their online banking portal, whereas others prefer to look at paper statements. When reviewing your statements, determine which expenses add to significant amounts. It can be helpful to divide your expenses into categories such as entertainment, recurring subscriptions, food, utility bills, rent or mortgage payments, loans or credit card debt, and so on. Some savings accounts can be split into custom-named accounts to help you track funds for each category, such as the Vermont Federal checking accounts.
Once you have determined how much money you spend monthly, look at your overall income. Include paychecks, commissions, investment income, government payments, and other regular income. To find your take-home income, subtract deductions like taxes, healthcare costs, and such. This is crucial for budgeting.
Now compare the amount of money going out with the amount coming in. Do they balance? If you spend more than your income, this is the perfect opportunity to make changes. See if there is room to adjust your spending habits to suit your financial needs better. You can use this free online budget planner worksheet to analyze your spending habits and determine where best you can trim your spending to help ease the financial burden.
2. Create Meal Plans to Eliminate Food Waste
The dollar is not stretching as far at the grocery store as it used to. Inflation increases are causing food prices to soar, making simple meals even more expensive than ever before. So, how can you manage to combat inflation while staying nourished and without feeling deprived of your favorite foods?
The best way to maximize your grocery budget is to plan your meals a week or two ahead of shopping to stay within your required monthly food budget. Meal planning allows you to minimize food waste by choosing recipes that use similar ingredients in various ways. You can enjoy delicious and nutritious meals on a budget by getting creative with your meal prep.
3. Consider Adding a Second Job or Side Hustle
Cutting down on your spending habits wherever possible is one great way to combat inflation, but you can also find ways to increase your monthly income by adding a second part-time job. Having a second source of income will increase your incoming cash flow to allow for rising expenses. It also provides a safety net of having a second source of revenue if you experience a job loss through layoffs. During high inflationary periods, layoffs are more common, so it’s good to prepare ahead of time.
Consider what skills you have to offer an employer and your available time, and start looking for earning opportunities that will fit your skillset and your schedule without causing the burnout of overworking. Consider starting up your business opportunity by finding a need around your neighborhood or freelancing with skills you already have.
4. Consolidate Traveling for Errands to Save Gas
With the increased gas prices accompanying rising inflation, making the most of each trip is a wise move. If you need to go to several stores, try to get to them in one trip rather than taking several different trips. Planning a weekly to-do list can minimize your travel mileage, reducing your overall transportation costs.
5. Pay Down High-Interest Credit Cards First
A running balance owed on credit cards with high interest rates can make paying off debt increasingly difficult. Focus on paying off your high-interest cards and loans as quickly as possible to reduce the interest you pay over time. You may even consider a low-interest balance transfer to reduce the interest accumulated each month—as long as you can pay the entire transferred balance by the end of the interest-free offer period.
6. Earn Interest on Your Savings with a High-Yield Savings Account
Consider storing your savings in a high-yield savings account. Earning a higher interest rate on your savings will help your money grow. The increased rate of return can make your money work for you to help match the rising cost of living.
7. Open a Reward Checking Account
Some financial institutions offer rewards programs for utilizing your checking account each month. Reward checking accounts are a quick and easy way to increase incoming funds or decrease expenses without much additional effort. Many institutions offer rewards like ATM fee refunds and interest incentives by meeting certain monthly criteria. Vermont Federal Credit Union’s Reward Checking Account, provides members the opportunity to earn up to $300 in bonus dividends and up to $300 in ATM refunds, simply by completing several easy steps each month.
Inflation can make managing personal finances challenging, but you don’t have to do it alone. The team of financial experts of Vermont Federal Credit Union can help you manage your debt and create savings strategies to help fight inflation. Contact the Vermont Federal Credit Union team today.
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