how to budget in times of inflation
The right adjustments can relieve your monthly stress.
November 8, 2022
With inflation at record highs, many Americans are finding it difficult to stick to a budget. After
all, when groceries have leapt in price and household staples can be double, or even triple, what they
cost just a year ago, how can the same amount of money get you through the month?
Sticking to a budget during times of high inflation is challenging – but not impossible. Here are five
ways to budget while in times of inflation.
1. Plan your grocery purchases
Groceries can take a huge bite out of a monthly budget. Fortunately, there are ways to trim your
grocery bill, even when prices are soaring.
First, shop your pantry and fridge before hitting the store. You may not remember exactly what you have
at home, and doing a quick scan of your food items can help you stick to purchasing only what you need.
Next, plan your week’s dinner menu before shopping so you can pick up exactly what you need for the
week in just one go. The fewer trips you make to the grocery, the less you’ll spend on impulse buys.
Also, when you have the ingredients you need and plans in place for dinner each night of the week,
you’ll be less likely to make a last-minute decision to indulge in takeout or fast food.
Consider joining a club store at this time as well. You’ll need to spring for a membership, but you’ll
enjoy steep savings on groceries and other products. Just be careful to only buy what you need, no
matter how cheap an item might be.
Finally, don’t forget to shop sales and utilize coupons when you can. Use apps like Reebee, Checkout
51, Flipp and Grocery IQ to stay in the know of what’s on sale in each store, and to download coupons
for even bigger savings.
2. Consider an energy audit
With winter approaching and the cost of energy sources still climbing, this can be a good time to have
an energy audit performed on your home. An audit will help identify energy drains around your home, such
as air leaks near your windows and doors, so you can fix them to make your home more energy-efficient.
You can also take additional measures toward saving on energy costs, such as switching all lightbulbs to
LED bulbs, unplugging electronics when not in use and setting your thermostat a little lower during
winter, and a bit higher in the summer.
3. Choose your indulgence
Everyone needs to treat themselves to something special every now and then, but with costs rising on
restaurant meals, movie tickets and clothing, something’s gotta give. Take a closer look at your
just-for-me purchases of the last few months and try to narrow them down to just one or two treats. You
can swap them with an enjoyable activity that doesn’t cost much, such as a hike or bike ride, or cut
them out completely.
Alternatively, you can find ways to trim the cost of your indulgences. For example, if you love dining
out but restaurant meals are destroying your budget, you can decide to eat out but skip the desserts and
wines or opt for a midday meal so you can take advantage of lunchtime specials.
4. Switch your auto insurance plan
If you’ve had your auto insurance policy for a while and you’ve maintained a good driving record during
that time, there’s a good chance you can save a bundle by switching to a new insurance plan and/or
provider. Reach out to a representative at your current insurer to discuss your options. Ask about
raising your deductible in exchange for a lower premium, reducing overall coverage or negotiating for a
safe driving discount. After obtaining a quote, call several other providers to get competing quotes.
You can choose to go with your lowest offer or call back your present provider and ask them to match it
for your continued business.
5. Pad your income
As always, when income doesn’t meet expenses, you have the choice of trimming expenses or boosting your
income – or you can do both! In addition to following the cost-cutting tips outlined here, you can also
look for ways to increase your income.
If your paycheck is suddenly not enough to support your lifestyle, consider a side hustle, like driving
for a ride-share company or consulting for hire, which you can do at your leisure on weekends. Ask your
workplace about taking on additional projects on an as-needed basis for additional pay. Open a small
service business doing something you love and excel at. Every extra dollar earned counts!
Times are hard for the average American consumer, but with careful planning, you can ride out the
record-high inflation rates and keep your budget intact. Use the tips shared here to get started.