When you're facing sky-high inflation and the dollars in your pocket isn't stretching as far as they used to, it's a great time to start thinking about ways to save more and reduce costs. Whether you're struggling to make ends meet, saving money, or investing during uncertain economic times, your life can change by changing your lifestyle and money habits.
If you are having financial problems, it's okay because you are not the only one. More than three in four Americans – around 77% – face serious financial situations. Getting your financial situation under control can take weeks or months because this problem can't be solved overnight.
You can reach your financial goals by educating yourself, putting in the time, and taking action.
1. Start investing early.
Although it may feel counterintuitive to pour more money into investments when your budget is tight, investing is more important than ever during times of inflation. Besides the fact that you should always be saving for retirement and allocating money towards investments, investing your money is one of the ways to beat inflation. This is because the growth you'll get on your money will ultimately far exceed the loss of value you are experiencing now due to inflation.
If you continue to store all your money in your savings account, your money is losing its value. To live a certain lifestyle, you need to start investing early. It's normal to feel scared and overwhelmed when you are new to the investing game, but it's scarier to have little to no money to use. The earlier you start, the better off you are.
2. Make a budget and stick to it.
Although it's always wise to live on a budget, it's even more critical during times of inflation. You might be shocked, but 73% of Americans don't follow a budget. Whether you use an app or write it down on paper, you need to take some time to sit down each month and consider your expenses. Allocate money for your investments and fixed costs, like rent, electricity, gas, and food. Then, set aside money for other expenses that you anticipate. After you've made a budget, commit to it and hold yourself accountable. This will help you avoid small impulse purchases that can add up and make it even more challenging to make ends meet.
3. Take a look at your grocery bill.
The grocery store is one of the biggest danger zones for breaking the budget. Fortunately, there are easy changes you can make to help you save money.
- Consider switching grocery stores: In most cities, there are multiple grocery stores–high-end stores like Sprouts or Whole Foods, middle-of-the-road stores like Trader Joe's and Kroger, and budget stores like Walmart. If you normally shop at a higher-end or mid-tier grocery store, consider trying a budget store like Aldi or Walmart. This can help you save a significant amount of money.
- Try grocery pick-up: We all know the feeling of coming to the grocery store with a list and leaving with five more items than you planned. Whether you're hungry or grabbed your favorite chips in the checkout line, it's hard to avoid impulse purchases when you shop in person. However, lots of grocery stores offer free grocery pick-up. This is a valuable way to save a few extra dollars.
- Pay attention to sales and coupons: Many grocery stores have weekly or monthly specials. Paying attention to sales or other promotions can help you stock up on staple items when they are on sale, so you never have to pay full price for things you know you'll use.
- Buy generic brand items: Buying store brand instead of name brand items can save you up to 25%. Consider replacing some of the name-brand items you normally buy with the generic alternative.
- Use coupons: Scan the weekly flyers or digital grocery store apps for coupons and consider planning your weekly meals around items that are on sale.
4. Cut subscriptions.
The average American family spends approximately $273 per month on subscriptions. Subscriptions can be costly if you don't use them often every month. You have Spotify, Amazon Prime, Netflix, Hulu, Disney+, and the list goes on and on. Cutting your subscriptions is a great place to start when your money is tight. Money-tracking apps like Mint or Truebill can help you find subscriptions you might not even realize you have. When you cut off some subscriptions, you can use that money for your other expenses, savings, or investment.
5. Unsubscribe from Emails
You don't buy things if you don't know what's out there. If you are a shopper, you'll be hitting the subscribe button to too many online stores and overspending a bit. When trying to save money, having many emails flood your inbox can be highly distracting and lead to unnecessary purchases. Unsubscribing from promotional emails can save your bank account by hundreds each month. If your goal is saving money, you need to stop shopping on impulse and subscribing to many stores.
6. Consider starting a side gig.
One of the best ways to make your money stretch further during inflation is to increase your income. Consider starting a side gig to bring in an extra few hundred dollars (or more) per month. As the world is shifting to a gig economy, many people start side hustles and business ventures to make more money each month. There are endless side-gig opportunities, including:
- Meal delivery
- Offering freelancing services
- Selling on Etsy
- Flipping furniture
- Cleaning businesses or homes
- Cut back on energy bills
- Getting on TaskRabbit
Another valuable way of saving money is decluttering your home. Take inventory of what things you have that you no longer need or haven't touched in more than a year, and consider selling them. Sites like Craigslist or Facebook Marketplace make it fast and easy to sell your items. You'll realize how much stuff you don't need to survive in this world.
Not only are you that, but you are saving yourself time and effort. When you own fewer things in your house, you know where certain items are located in your house, and you won't spend a lot of time looking for things like your TV remotes. A clean and clutter-free home is great for the environment and your bank account because it helps reduce waste and spending.
8. Don't take on more debt.
Although debt is almost always a bad idea, it's even more dangerous during inflation. With everything being pricy, you don't want to pay for your expenses on top of any debt you may have. Debt can eat up the majority of your income. Whether you have credit card debt or student loans, you want to make sure you are paying them off in a reasonable time. When your income is already limited, the last thing you need is to add another monthly payment and interest to your already inflated costs. If you clear all your debt, saving money will be a lot easier since you don't have that huge burden on your shoulder anymore.
9. Limit transportation costs
Finding ways to cut down on transportation costs can be a big money-saver. Some ideas include:
- Carpool with coworkers to work or with friends to activities
- When meeting friends, find a spot halfway between each of you
- Make an effort to get gas at the cheapest gas stations possible. Apps like GasBuddy can help with this.
10. Reduce your energy bill
Many people's energy bill is probably soaring to the roof. Reducing your energy bill is another great tip for saving money. Simple changes like turning lights off when you leave a room or limiting your use of the air conditioner and heater can significantly reduce costs. Investing in smart home devices is another way to control your energy usage. Although these devices have an upfront cost, over time, they can help save money.
Let's Make it Happen!
Whether you are struggling during these difficult times, a simple change in your lifestyle can contribute to a better life. Saving money does not need to be complicated. You can still meet your financial goals even with inflation with a few changes. It takes time and work, but it'll be worth it. Continue to learn, and never stop giving up on your future!
Do you have any tips for saving money?
She started her blog, The Money Dreamer, when she realized the 9-5 job was not the lifestyle she wanted anymore. After designing for a while, she wanted a more meaningful life, which was freedom, so she decided to venture out. She took action so that she can live her dream life and decided to help people to live theirs by helping them how to save, budget, and invest.