Inflation is continuing to surge around the nation and the world. What was hoped initially to be transitory seems to be settling in as a long-term trend, and many consumers in America are looking for ways they can get creative with their spending to beat inflation or at least reduce its effects on their lives.
The following are six things you can incorporate to help you save money, even when grappling with inflation’s effects.
1. Shop Around for Insurance
There are viable ways you can save on insurance. For example, you might want to check in with your car insurance every year and make sure you’re still getting the best deal. The cost of insurance can vary quite a bit depending on where you live and your insurer. In terms of car insurance, as an example, Illinois car insurance is $1,079 a year on average, while it’s $1,311 annually. While you can’t do much about where you live, there are other ways to save.
Along with comparing companies, generally, making sure you shop around is going to help you save money.
If you have some cash stashed aside for an emergency, you can raise your deductible and then pay less on your premiums.
Bundling your insurance remains another good way to save here. Most insurance companies will offer a discount, and sometimes one that’s substantial, if you buy at least two types of insurance from them, like homeowners and auto, or you have more than one vehicle you’re insuring with them.
If you’ve noticed your mortgage has gone up recently, take a look and see if it’s because of an increase in homeowners’ insurance, indicating you should start shopping around.
Too often, people will be on autopilot with their insurance and miss opportunities for sometimes significant savings.
2. Take a Close Look at Your Expenses
When inflation and the economy are struggling like they are now, it’s a good time to go over your expenses and your budget very carefully. Look at your bills to start with. Common bills where you might be able to lower your expenses include recurring subscriptions, your phone, and internet bills, and, as mentioned above, your car and home insurance.
These are areas where you can either eliminate the expenses altogether or almost always find ways to reduce them.
It sounds simple to look at your expenses, but so many people don’t. Like is true with insurance, you tend to get on autopilot and not realize how many things you can reduce your spending on or cut out altogether with minimal impact on your life.
3. Re-Evaluate Your Wants
When there’s a lot of inflation, it’s a good idea to try and cut out the things that are wants and not needs.
This can go back to the idea of going over your expenses and being careful about what’s going in versus out. You can use a budgeting app to start to track your patterns of spending more closely and identify problems before they become something more.
Even when the economy is stronger, and inflation isn’t such an issue, you can use these habits you build now to keep you on solid financial footing.
4. Deal With Debt That’s a Variable Rate
The Fed has been consistently raising interest rates, and this may not stop any time soon. That means if you have variable-rate debt, the costs of holding it will continue to go up.
Whether you pay it down, pay it off, or consolidate it into fixed-rate debt at a lower rate, you can soften some of the blow of inflation.
5. Assess Your Long-Term Investments
Right now, the stock market isn’t performing well either, yet the returns on things like savings accounts are minuscule compared to the increases in the cost of living.
It puts investors in a tough spot, but you do need to think about how your investment strategy is going to be able to beat inflation. For this to happen, your returns in total have to be more than the increase in your cost of living.
Long-term investing is one way to make this happen.
If you can buy shares of good companies at a lower price over time, you may be able to, at a minimum, keep pace with inflation.
6. Invest In Yourself
Finally, now is a good time to think about how you can increase your earning power. This might mean you finally start a side hustle or getting a new certification that will advance your career. Wages are rising along with inflation, so think about whether it’s the right time to ask for a raise.
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