Inflation is rising again — in fact, it rose 7.9 percent in February 2022, which is the highest level since 1982 according to the Bureau of Labor Statistics. Most of us are experiencing the impact of these changes in our everyday lives, but there are certain ways you can cut costs and save money during high inflation.
Create and stick to a budget.
This is a good rule to live by even outside of inflation, but especially so as prices continue to rise. Keeping a budget that you regularly track and adjust as necessary is essential to avoid overspending. Things like gas and energy, food, appliances, cars, and internet services have all seen a jump in prices, and a good way to keep your budget down is to shop smart and dedicate only what you need to each category. Utilize discount stores and stock your pantry with non-perishables, check gas prices ahead of time, consider switching phone or internet plans, and stick to the absolute essentials.
Set your priorities.
It’s important to prioritize the things you need versus the things you want during a time of inflation, especially if your budget is tight. If you commute to work and are spending more on gas, perhaps you need to dine out a little less or cut back on shopping to dedicate more to fuel. You can start by making a list of everything you typically buy in a month, then order them from highest to lowest priority. If you’re spending more on an item halfway down your list than you are at the top, consider readjusting your budget.
Compare your options.
Comparison shopping is another effective way to help keep costs down. If you typically shop at the same store or buy from the same companies, try looking at other options such as smaller local shops or discounted bulk shopping. You should also take maximum advantage of the internet to compare different brands’ pricing, find deals or sales, and use coupon or discount codes when available.
Keep your investing portfolio diverse.
Investing has been shown to be an incredible way to beat inflation, especially if your portfolio is built from varied assets such as stock funds and bond funds. A diverse portfolio helps keep you from being too exposed to a single asset in the event of a downturn. Data also shows that the average annualized return of the S&P 500 is about 10 percent. You may also want to weigh your options in tangible assets like real estate and commodities, as well as essentials like food and energy that are always in high demand.
Remember, we’re in this together.
Inflation is something that affects us all and changes the ways we handle our personal or business finances. Eventually inflation will subside, but in the meantime, our team is here to help. If you have any questions about inflation, how to best manage your money during this time, or anything else, don’t hesitate to rely on us at Republic Bank of Chicago. You can reach us by phone at 800-526-9127 or find more financial tips on our website.