These days, everything from gas to utility bills to food is costing more. We can blame that on inflation.
In December, the Consumer Price Index, which measures the cost of consumer goods, reached 7%. That represents the index’s highest level in 39 years. It also explains why so many consumers are struggling financially these days.
If you’re paying more for just about everything in your life, you might assume you’re doomed to either have to raid your savings, rack up debt, or fall behind financially in another way until daily expenses start to come down. But if you employ these three tips, you can eke out some savings on everyday purchases even while inflation is raging.
1. Do your research
It’s true that food and gas costs are up. But if you’re willing to put in the time, you can set yourself up to pay less for them.
These days, supermarkets do a great job of advertising sales online, so you can plan your shopping trips accordingly based on the items you need for your fridge and pantry. You can also use apps like Gas Buddy to see where you can fill up your car for less. Similarly, if you need clothing, household items, or supplies to do home maintenance or repairs, spending some time researching store prices could go a long way.
2. Set priorities
You may have recurring expenses in your budget that are reasonable when general expenses aren’t as high. But right now, retaining some of those add-ons may not be as appropriate given the current financial circumstances.
Look through your budget and prioritize your spending categories. You may have no choice but to spend a certain amount of money on things like food for your family and fuel for your car. But it could make sense to drop one streaming service, or if you have kids, replace an expensive extracurricular activity with a lower-cost alternative until inflation calms down.
3. Score more cash back from your credit cards
The more cash back you’re able to eke out of your credit cards, the more you’ll offset the higher prices you’re paying — and the more savings you’ll reap. Take a look at your credit cards’ rewards programs and figure out which card should be used per purchase category. If one of your cards offers 2% cash back on gas and the rest only offer 1%, you’ll know which one to swipe at the pump.
If none of your current credit cards offer any opportunities to snag bonus cash back on everyday purchases, you may want to consider applying for a new one that does. That said, be careful not to apply for too many new credit cards at once, as that could cause your credit score to shrink. And you’ll want to keep your score in good shape in case a near-term need to borrow money arises.
Inflation is making it harder than ever to manage everyday expenses. Keep these tips in mind to reap some savings during these tricky times.
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Original source: The Motley Fool