Are you having a harder time stretching your dollar to pay for the same bills and groceries you always buy? Although unemployment rates remain low and labor shortages have fueled a rise in wages in many industries, rapid inflation is causing budget challenges for many. Interest rate spike, rent increase, higher gas prices, you name it, inflation has caused a price increase.
More recently, inflation is up 9.1% year-over-year based on the Consumer Price Index for All Urban Consumers—the largest increase since 1981.
To keep the bread in the breadbox, the gas in the tank, and the money in your wallet, we’ve outlined eight budgeting tips below on how to deal with inflation.
#1 Revisit Your Wants and Needs
Rising inflation and a price increase of pretty much anything means considering your wants and needs. Don’t worry—this section isn’t about denying every luxury. We require a balance in our lives of what’s required to survive and what helps us flourish, and understanding how to prioritize and meet those needs is the foundation to a healthy budget.
Typically, everyone has the same basic needs, which include:
- Access to shelter with heat and cooling
- Food and water
- Utilities covering water, sanitation, energy, garbage and recycling
- Health care
- Clothing
For many people, wants in a budget are often categorized as:
- Eating and/or drinking in restaurants and bars
- Upscale clothing, shoes, and jewelry
- Travel
- Entertainment such as concerts, sporting events, or other ticketed venues
- Electronics and home entertainment services and products
But at the end of the day, wants are also about how you meet your needs. Are you paying more for your rent, your groceries, or your winter boots than you need to?
To come up with a useful, personalized approach to defining wants and needs in a way that helps you find savings opportunities, consider:
- Personal values – Do you make choices about where and how you buy to align your spending with ethical concerns? If so, evaluate your past choices and research alternatives. Are there lower-cost options to businesses and products that prey on values in their marketing?
- Health – If weekly yoga is essential to your mental health, then put it on the needs list. Consider what it is that you require to be physically and mentally healthy, and then investigate your options. For instance, can you try out a lower-cost yoga studio or community class? If you take prescription medication, can you save by switching from a 30-day supply to a 90-day supply?
- Lasting value – For almost any product you purchase, you can choose from a range of price points. The cheapest price tag, however, isn’t always the best value. If your workplace requires business wear, high-quality classic clothing that you take care of and wear for years may be a wise investment. And if your job keeps you on your feet for hours, well-made, supportive shoes will protect your health as well as your toes.
#2 Reduce Your Grocery Spending
It’s no doubt that the effects of inflation have spread to the rising cost of groceries, but that doesn’t mean you can’t reduce spending in this category. It’s not all about coupon clipping—you can reduce your grocery spending by paying attention and applying savvy strategies to how you plan and shop for your meals. These include:
- Know your pantry—use what you have, and buy to round out your supplies
- Compare prices at multiple stores for products you buy frequently
- Buy seasonal fruits and vegetables
- Try store brands
- Buy loss leaders and items on sale
- Join grocery and discount store savings card programs
- Stock up on shelf-stable and frozen goods when prices are low
- Keep track of use-by dates and plan meals around them
- Include lower-cost non-meat proteins in your meal plans
#3 Review Ongoing Charges
Most of us have a bad habit of accepting anything that’s static for a certain amount of time as “just the way it is” and focusing only on new purchases or choices when resources are limited. If money is tight, you probably won’t be too tempted to drop a thousand dollars at an art gallery.
Are you applying the same editing to your ongoing spending? Look at your bills and spending habits and consider:
- Streaming services that overlap. How much TV can you actually watch?
- Phone and internet expenses, and shop around for lower-cost plans
- Self-care or workout services you can shift to doing at home
- Subscriptions to magazines or organizations you can do without
- Warehouse club memberships. Do you actually save on your needs there?
#4 Save on Gas
Okay, you’re not going to stumble across a gallon of gas perched on a clearance end cap at a discount store, but there are ways to chip away at your fuel costs—and with rising oil price trends, every bit counts.
Look for savings on high gas prices via:
- Timing – Fill up on Monday (or Friday as second choice) when prices tend to be lowest
- Apps – Apps that identify gas costs at nearby stations and allow you to sort by price
- Coupon codes – Coupons or savings offers on grocery store receipts or via grocery member cards
- Reward programs – Gas station chain discount and reward programs may help you cut costs, as well as gas stations associated with warehouse club stores, military bases, and select discount store chains
- Fuel rewards – Applying fuel rewards via credit cards may help decrease your weekly spend
So while you can’t magically control the rising price of your local gas station, you can still find ways to save.
#5 Round Up Your Discount Offers
Do you know what discounts you already have access to? It can be difficult to differentiate between marketing offers that are disguised ways to collect your data and useful discounts through your various memberships and accounts. But in a budget crunch, make sure you’re not ignoring genuine savings opportunities.
Visit provider websites and look for available offers and discounts through your:
- Banking, credit union, and credit card institutions
- Health insurance provider
- Auto and home insurance providers
- Warehouse club memberships
- Professional associations
#6 Check Out Your Community Resources
Paying taxes is something you can’t remove from your budget, but are you making the most of the services that your taxes support? Investigate the institutions and centers in your neighborhood to find free or lower-cost alternatives to entertainment and other spending.
Many libraries and community centers provide these items for free:
- Access to digital books and comic books
- Movies and TV shows on DVD or digital streaming
- Use of 3D printers, engraving and sewing machines, and design software
- Access to online course providers such as Lynda.com
- Accounts on self-publishing platforms
- Tickets to local museums, galleries, plays, and entertainment centers
You may also find low-cost classes, concerts, and experiences that can provide a smaller imprint on your entertainment budget through libraries and community centers.
#7 Find a Coliving Community
It’s also no doubt that high inflation effects have spread to the rising price of rentals. That’s one answer to why rent is increasing. When dealing with the rising cost of rent, it helps to look at different options like considering a coliving community. Coliving is a new way to share space in big city rental markets while still having your own private home area. For years, the trend to afford space in hot cities has been to either pile on multiple roommates or to rent smaller and smaller studios as prices keep rising. Neither option is a great fit for how most people actually use their home space.
When you’re stuck in a tiny studio, it can end up feeling like a claustrophobic container for all of your free and personal time, not to mention if you end up working from home. Forget entertaining guests or throwing a party—you’ll want to leave the apartment just to breathe deeply.
On the other hand, a larger space shared with roommates may result in an inability to have the space you need to work or enjoy the tranquility.
Coliving strikes a better balance, providing:
- A private bedroom in a shared coliving space
- Household essentials, WiFi and utilities
- Cleaning service for shared areas
- Spacious zones for entertaining and relaxing, usually both inside and outside
Another benefit of coliving is a focus on intentional community, which may be created through:
- Apps to connect fellow coliving members in the same home building
- Events and socializing opportunities
- Shared resources, from tools and amenities to neighborhood knowledge and discounts
Do You Need a Formal Budget? (Yes. The Answer Is Yes.)
It’s not that financial planners assume you’re wandering blankly through your days spending money on autopilot in response to advertising and habit, but…face it, most of us are.
If you’re wondering how to deal with high inflation or you’ve ever scanned a headline about how Jill saved up to buy a house just by cutting out her daily cappuccino habit, you’ve seen the evidence of how much depends on minor, routine purchases. Most of us don’t run into trouble over impulse-buying yachts—it’s the day-to-day spending and lack of comparing rates and vendors for monthly services that drain our resources.
You won’t know what slow leaks could be plugged up, or when it’s worth your time to shop around for a new phone plan until you have a monthly budget filled out to review. There are many free budgeting apps, and your bank or credit union may also have resources or tools you can use at no cost.
Coliving With Common
Wondering how to deal with rising inflation? Are you paying for entertainment or gathering spaces you use infrequently? Looking for more connection with peers and friends after too much time in your own bubble? Moving to a major city? Coliving at Common may be a perfect fit for you.
Our homes are available in key metropolitan areas and popular with young and middle-income professionals. Our homes allow you the flexibility to live in a 3+ bedroom apartment with a private bedroom with beautifully designed indoor and outdoor areas, and high-end kitchens complete with cleaning service.
In today’s competitive rental market—especially in top city locations—coliving allows you to make a home with a just-right balance of sanctuary and community. We invite you to visit Common today for a virtual tour of our homes, currently available in Birmingham, Chicago, Jersey City, Los Angeles, New York City, Philadelphia, San Francisco, St. Paul, or St. Petersburg.
Sources:
U.S. Bureau of Labor Statistics. Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years. https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm
GasBuddy. What Is the Cheapest Day of the Week to Buy Gas in 2022? https://www.gasbuddy.com/go/what-is-the-cheapest-day-of-the-week-to-buy-gas-in-2022