Are you wondering what kind of impact inflation may have on your money? If you’re hearing all the chatter in the news about inflation and how it can affect your finances, we have some ideas on ways you can manage your money when inflation is on the rise.
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Transcript:
Welcome to Money Tip Tuesday from the Making Money Personal podcast.
If you’ve browsed news articles lately, you are likely to have come across stories covering the topic of inflation.
Inflation is a common occurrence in the current financial system and there is a measure of it that happens every year.
The concern arises when that rate increases by a substantial amount. One of the biggest factors of an inflationary period is an increase in prices.
You may notice an increase in prices for everything across the large variety of goods and services.
If you’re seeing this happen in your neighborhood, there’s no need to panic. But you should make some financial adjustments to offset the rise in prices.
Here are a few things you can evaluate to minimize the impact inflation may have on your cash flow situation.
Budget for your needs first.
It’s time to re-assess your budget and focus on what your NEEDs are as opposed to wants. Be really honest with yourself about what a need is and what a want is. Things like housing, food, electricity, and water are all your needs and you should budget for all those first. Once those items are covered then add in more as you allocate your funds down the list. What’s important here is that you focus on making sure all your needs are covered so you don’t spend unnecessary funds on things that are only wants.
Find things to cut out of your bills.
It’s wise to do this on a regular basis anyway. When you’re going through your budget, look for other line items that you no longer use, and remove them. Things like unused subscriptions or expensive top tier package options. Remove those so you can put that money to other necessities. You can even call your cable, cell phone provider, and insurance company and see if you can negotiate a lower price. They may give you a discount to keep your service.
Make some lifestyle changes.
If you’re spending too much money in certain areas of your life like excursions, fancy trips, or expensive foods, you may want to make some lifestyle adjustments. Find ways to either do them for a lower cost or replace it for another, less costly, experience. You might discover a great new hobby or interest that you enjoy as much for way less.
Buy items in bulk to avoid paying the price increases as they go up
Stocking up on bulk items can save you long-term costs. If you anticipate a price increase on things you already purchase, you can consider going to a big box store like Costco or BJ’s and buying those items in bulk to store for later. Just make sure you have the space to store it all and that those items have a long shelf life.
Use coupons or saving apps or browser extensions
If you’re not doing this already, now’s a great time to start. Use browser extensions like Honey which will automatically search to find the lowest price for the items you have in your cart. If you’re interested in using coupons, other services can run promo codes through your online checkout and let you know if there are any deals out there you’re missing.
Cash in rewards points on credit cards or other rewards programs
If you’ve been neglecting your credit card cash back program you may find a large collection of points you can redeem for cash back or other rewards. It also may be a
