For both Americans and for people around the world, the last several months have been financially rough. Ordinary tasks such as filling up your car, buying groceries, and running errands have added extra sticker shock for regular consumers, as the inflation rate hit 8.5% in March 2022, according to a U.S. Inflation Report in April 2022. This is the highest inflation has been in 41 years, and with wages not keeping up with these unprecedented rates, consumers have had to get a little creative with their budgets.
If you need extra help re-working your budget to adjust for these new high costs, here are a few helpful tips:
Track your spending within your budget.
It’s already advised that you watch what you spend either by regularly checking your online or mobile banking apps or keeping a ledger, but with higher prices everywhere, it’s even more important now to see how much you’re spending. It’s a good idea to follow the 50/30/20 rule when it comes to budgeting – 50 percent of your income on needs like food, housing, and transportation; 30 percent on wants like entertainment, dining out, or takeout; and 20 percent on debt payments and savings.
Watch how you use your debit and credit cards.
When you’re swiping or inserting a piece of plastic to make purchases, it can be easy to overspend as you’re not seeing the money disappear from your wallet or account. And with interest rates rising alongside inflation, credit card debt could get even more difficult to pay off. Save your credit card purchases for when they’re necessary, and make higher than minimum payments every month whenever you can.
Spend less each month if you can.
Subscription services have become increasingly popular, but they can add up in a negative way if you aren’t careful. While a streaming service might only run you $5-10 a month, keeping multiple subscriptions can put a dent in your checking account. Consider how you’re spending money and come up with a couple of monthly expenditures you can comfortably do without.
Focus on energy efficiency in your home and lifestyle.
You save a good chunk of change every month by keeping your lifestyle energy efficient, both in your home and elsewhere. Keep an eye on your thermostat and only run your air conditioner when it’s necessary, and avoid peak hours; using less hot water during peak hours as well can also save you money. Avoid disposable items such as paper plates and cups at home as they just add to your monthly grocery bill. Additionally, if possible, use your car less and look into your city’s mass transit options or walking routes.