How to Budget in Times of Inflation

With inflation an ongoing concern, many of us are finding it a challenge to stick to a budget. After all, when groceries have skyrocketed in price and some household staples are 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 difficult, but not impossible – and USALLIANCE is here to help! Here are five things you can do to tighten up your budget and give yourself some financial relief in times of inflation.

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. By doing a quick scan of your food items, you can 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.

While you’re tweaking your grocery shopping routine, consider joining a club store 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, remember to shop sales and use coupons. Use apps like Reebee, Checkout 51, Flipp and Grocery IQ to find out what's on sale in each store and download coupons for even bigger savings.

USALLIANCE Tip: Apply for our Visa Signature Credit Card! It offers 6% rewards at grocery stores to help you save during inflation!

Consider an energy audit

With winter in full swing and the energy costs still climbing, this can be a good time to conduct an energy audit for 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 to LED lightbulbs, unplugging electronics when not in use, and setting your thermostat a few degrees lower this winter.

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 has to give. Take a closer look at your just-for-me purchases over the last few months and try to narrow them down to just one or two treats. Try swapping a costly indulgence with an enjoyable, free activity like a hike or bike ride.

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, next time you eat out try skipping the desserts and wines or opt for a midday meal to take advantage of lunchtime specials.

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 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, check with 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.

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 the cost-cutting tips we have outlined here, you can also look for ways to increase your revenue.

Consider asking for a raise if your paycheck is suddenly insufficient to support your lifestyle. Your workplace may have already given you a cost-of-living raise to reflect rising inflation last year, but this may need to be revised as costs continue to increase. Don't be afraid to ask for another raise!

You can also look for other ways to pad your monthly income. Find 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!

Americans have seen record-high inflation rates recently, and the issue of inflation may not be going anywhere anytime soon. Despite these difficult economic times, by using these tips and doing some careful planning, you can weather the inflation storm and keep your budget intact!