2022 inflation levels hit a 41-year high, averaging around 8.6% for May, according to the Bureau of Labor Statistics.
That kind of increase can put a serious strain on a budget. You might even find it hard to stay afloat.
If you’re feeling downtrodden under the weight of increased gas prices, grocery bills, and everything else, here are a few ideas that might help you stay on your feet:
Cut Down on Electricity
It’s not just consumer goods that are getting more expensive: in mid-2022, natural gas and electricity costs had increased more than 5.6% from 2021 levels, according to the U.S. Chamber of Commerce.
To help Americans cope, the U.S. Department of Energy has released some energy-savings tips.
Here are the highlights from the DOE article:
- Look for air leaks around windows and doors. Sealing these can potentially save you 10-20% per year on heating and cooling.
- Unplug electronics when not in use. Appliances like smart TVs can use lots of energy, even when not in use.
- Use LED bulbs. Now might be a good time to switch any inefficient bulbs with low-energy versions.
- Get a home energy assessment. Some energy companies provide this service for free.
Save on Fuel Costs
Filling up the tank can feel dreadful when prices are climbing.
To cope, many Americans are cutting down on their travel. But if you can’t do that, consider at least driving more slowly; engines often become much less fuel-efficient when going above 60 mph.
Also, cheap gas is a hot commodity, so make sure you’re getting the best price around.
Finally, when possible, carpool. You’ll get to work for cheaper and you might make a few friends.
Ask for an Inflation Raise. . . The Right Way
Are you entitled to a cost-of-living raise because of inflation?
Not necessarily, but many employers understand that their workers are in financial need right now. Also, depending on the industry, they know that demand for workers is high and are more likely to want to keep the employees that they have.
So for many, now might be a good time to ask for a raise. When popping the question, it’s still important not to sound entitled and demanding. Instead, try starting the conversation in a way that shows commitment to the company and the desire to bring value. Consider this script:
“Hi, I’m enjoying working here and want to continue doing so for the foreseeable future. However, I’ve been comparing my wages to industry averages and have noticed my pay rate doesn’t compare favorably. Also, inflation is cutting into my budget and I’m exploring solutions, such as cutting expenses and increasing my income. As such, I’d like to discuss a pay increase. When do you think might be a good time to talk about this?”
Focus on Food-Spending Reductions
Eating out can eat through a budget and be a prime source of spending. But even without the restaurants, eating isn’t as cheap as it used to be. Especially considering that the cost of meat has spiked by 13.2% in 2022.
Still, people are often surprised at how much they can save from their grocery budgets just by doing the following:
- Buying in bulk
- Shopping at local farmers' markets
- Eating more filling carbs like rice and pasta
- Having meatless Mondays
- Never shopping hungry!
One final note: don’t forget the coupons. Even if you shop online, chances are there are easy-to-find discounts if you take the time to look.
Lower Your Bill Payments
In addition to normal inflation, credit card rates in 2022 are also on the rise. For debt-holders, this can mean that monthly bills for interest are getting a bump up at the worst possible time.
If you hold multiple sources of debt, now might be a good time to consolidate those into one monthly payment. In many cases, this might make your payments lower while you get through the inflationary period. As a bonus, having one single source of debt to manage can free up your time and attention to focus on other cost-saving areas.
This Too Shall Pass
Money trouble can take its emotional toll, especially when sacrifices need to be made. But sometimes, budgeting lessons learned during hard times make it easier to save when things get back to normal.
Now is a great time to sharpen up your budgeting game and reduce your expenses. Try to cut your expenses, increase your income, and, if necessary, consolidate your debts to stay on your feet and emerge stronger than ever.