When inflation hits, almost everyone feels the pressure. Regular purchases such as filling gas tanks, paying monthly utility bills, and buying just about anything—cars, household supplies and groceries—can blow personal and family budgets quickly. So, how can you manage and stretch your dollars when prices for everything are two, three or four times higher than before?
Here are some daily and long-range practices to help you manage through inflation.
1. Set a budget.
Keeping a budget and knowing where your money is going helps you manage your costs. Eighty-five percent of the respondents to debt.com’s survey reported that having a budget helped them get or stay out of debt. To start a budget, pick a tool that works for you. Most people still use a reliable paper and pen version, and over a third surveyed create spreadsheets. Apps and software like Mint and Quicken are also widely available. Next, begin tracking your monthly income, your high-priority expenses like rent or mortgage, and discretionary expenses such as entertainment.
2. Spend less on discretionary expenses.
When the cost of living is up, it is a smart time to look at your overall financial picture for savings opportunities. Discretionary expenses—things you choose to spend money on rather than need to pay for—are a great first place to start. Review your recurring expenses, such as subscriptions or little used memberships. Reconsider frequent coffee or food purchases and switch to making these drinks, snacks, or meals at home. Try downloading books and reading magazines online through your local library for free. You’ll soon be able to find even more opportunities for saving or cutting expenses.
3. Embrace veggies.
Prepare meatless meals several times a week. Instead of serving pricier beef, pork, poultry, or seafood, explore recipes that center on seasonal vegetables for healthy, less expensive, and refreshing meals. Each season brings new options, so check out different recipes often online or swap ideas with friends and family.
Seasonal, frozen, or canned vegetables and fruit tend to be lower priced. Check local farmers or farmers markets for fresh produce and Community Supported Agriculture (CSA) programs to receive garden-fresh bounty at reasonable prices.
4. Maintain an emergency fund.
Always, you should have money set aside for an emergency, be it medical, a car issue, a job loss, or another situation. Unfortunately, for many people, that’s not always easy to do. A January 2022 Bankrate poll indicated that 56% of Americans would find it difficult to cover an unexpected $1,000 bill. Try to prepare for that possibility by setting aside whatever money you can now.
You may also want to have in mind family or friends you could contact for money if you were in a crisis. Or you may be the one they turn to for help. Either way, Western Union makes it easy to send money reliably to more than 200 countries and territories worldwide, giving everyone a choice in how they send money online or through the Western Union app. A loved one texts you for help; you get some information on where they want the money sent, open the app, make a few clicks, and you’re done.
5. Pay off existing variable debt.
If you do have money left after paying your bills at the end of the month, apply it to paying off variable debt. Variable debt is any debt that has an interest rate that is not fixed but instead goes up and down with the prime rate index banks use. Variable debt may include certain credit cards, lines of credit, personal loans, home equity loans and even some mortgages.
