Consumers are feeling the impact of inflation from the gas pump to the grocery store and everywhere in between. Inflation — an extended period of rising prices — can take a real bite out of your budget. Consumers are feeling the impact of inflation from the gas pump to the grocery store and everywhere in between.
According to Tessie Dupuis, Banking Officer and Manager of Lakeside Bank’s Oak Park branch, higher prices mean many people are having to find ways to stretch their income. “Periods of rising prices can be unpredictable, and there’s no way to accurately predict how high inflation might climb or how long it will last. Learning how to adjust can help you rethink the way you spend — and potentially find money to save.”
She offers some strategies for protecting your finances from the worst impacts of inflation.
Make a Budget
Having a budget is always the best way to keep costs under control and is even more important during a time of inflation. By tracking spending, you can identify where there have been significant increases as well as where you can save money.
Eliminate Unnecessary Expenses
If you’re spending money in places that are enjoyable but maybe not essential, taking a break or pausing things like subscriptions, memberships, dining out, and more can help you shift this spending to cover higher costs for necessary expenses, such as food, gas, utilities, and others.
Pay off Variable Debt
Paying down debt, especially variable debt, like credit cards, lines of credit, personal loans and variable rate mortgages, should be a priority during a time of inflation. The money you’re spending on interest could help you cope with rising costs. Look for a lower interest or 0% APR transfer option for credit card debt, which would give you time to pay back what you owe with no interest. A personal loan is another option that could consolidate high interest debt at a lower fixed rate.
Don’t Stop Saving
As challenging as it may be during a time of rising expenses, having an emergency fund with three to six months of expenses set aside is more important than ever. This easy-to-access money will help you overcome any immediate and unexpected financial challenges.
Feeding your family isn’t something you can cut from your budget, so it’s important to find ways to shop wisely to find savings. Here are some tips that can help:
- Follow weekly sales and use coupons to plan budget-friendly meals.
- Swap out brand-name items for generic products as much as possible.
- Buy in bulk to get needed items at a lower unit price.
- Incorporate more meatless meals and more low-cost staple items into your meals, such as pasta or rice.
Negotiate Better Insurance Rates
This is a good time to review your homeowners and car insurance policies for opportunities to save. You can also shop around with other companies to see if a better rate is available.
Yes, inflation is high, but if you’re budgeting, cutting costs where you can and saving, you’re a step ahead of many others.