How to Budget in Times of Inflation

Sticking to a budget during times of inflation is challenging – but not impossible. Here are five ways to help make it happen:

1. Plan your grocery purchases

First, shop your pantry and fridge before hitting the store. You may not remember what you have at home, so a quick scan can help you stick to purchasing only what you need.

Next, plan your week’s dinner menu before shopping so you can pick up what you need for the week in one go. The fewer trips to the grocery, the less you’ll spend on impulse buys.

Finally, don’t forget to shop the sales!. Use apps like Checkout 51, Flipp and Grocery IQ to stay in the know of what’s on sale in each store.

2. Consider an energy audit

With winter approaching and the cost of energy sources still climbing, this can be a good time to have an energy audit performed on your home. An audit will help identify energy drains, such as air leaks near your windows and doors, so you can fix them and make your home more energy efficient.

3. Choose your indulgence

Everyone needs to treat themselves to something special every now and then, but with costs rising on restaurant meals, movie tickets and clothing, something’s gotta give. Take a closer look at your just-for-me purchases, and try to narrow them down to just one or two treats.

You can also find ways to trim the cost of your indulgences. For example, if you love dining out but restaurant meals are destroying your budget, you can eat out but skip desserts and wines, or split an entrée with your dining partner.

4. Switch your auto insurance plan

If you’ve had your auto insurance policy for a while and you’ve maintained a good driving record, you might save a bundle by switching to a new policy and/or provider. Reach out to your current insurer to discuss your options. Ask about raising your deductible in exchange for a lower premium, reducing overall coverage or negotiating for a safe driving discount. After obtaining a quote, call several other providers to get competing quotes. Go with your lowest offer, or call back your present provider and ask them to match it for your continued business.

5. Pad your income

If your paycheck is suddenly not enough to support your lifestyle, consider asking for a cost-of-living raise. You can also look for other ways to pad your income, such as driving for a ride-share company or consulting for hire on weekends. Every extra dollar earned counts!

Yes, you can get through times of inflation and keep your budget intact! Use the tips shared here to get started.

Is Inflation Here to Stay?

According to the most recent report by the Bureau of Labor Statistics, U.S. inflation is currently running at a 13-year high of 5.4%, and it’s showing no signs of slowing. Here’s what to know about the current state of the U.S. economy and what you can likely expect in the coming months.

Inflation is not going anywhere soon

Rising prices in just about every sector is the new norm. The inflation rate fell at the start of the coronavirus pandemic, and during the nationwide lockdown as people hunkered down at home. In March 2021, though, when the impact of halted manufacturing began hitting the market and crude oil prices started climbing, the inflation rate increased to 2.6% before hitting its current high of 5.4% in June and July. Although the rate started falling in August to 5.3%, it went back up to 5.4% in September. Experts, like the Trading Economics information technology company, now expect that number to continue rising, probably hitting 5.5% in the coming months.

Unfortunately for the average consumer who’s struggling to cover expenses amid rising costs, this means inflation isn’t going anywhere soon.

Why are prices so high?

There are several factors for the inflation bubble. First, suppliers are still catching up on production shortages that were caused by factory shutdowns during the pandemic. Second, climate disasters, like California wildfires and a drought in Brazil, are responsible for driving up prices in the food industry. The demand for higher wages, partially caused by the 10.4 million job openings in the U.S., and the rising cost of gas, are contributing to inflation as well.

What can consumers expect in 2022?

While no one can accurately predict the future, economists are expecting inflation levels to taper off by the middle of 2022. According to a survey conducted by the Wall Street Journal, many are expecting inflation to drop to 3.4% by June 2022 and to continue falling until it hits 1.8% by the end of the year.

PLEASE NOTE: The statistics and estimates supplied in this article were sourced via the hyperlinked references throughout the blog, and not by High Point Federal Credit Union.