There’s no magic solution for individuals to combat the rising cost of living. But there are strategies anyone can employ to save money. Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
American consumers have been hit with rising prices from all sides, from gas and groceries to clothes and appliances.
U.S. inflation stood at 8.3% in April, close to March’s record-breaking high of 8.5% , according to the Labor Department. Prices for food, travel, housing, and gas were especially high.
So how are consumers coping?
Unfortunately, there’s no magic solution to avoid the rising cost of living. Most people can’t just move to a cheaper apartment to save on housing or stop commuting to work in order to avoid filling up. But financial planners have a few strategies they recommend to clients to help soften the impact inflation can have on their bank accounts and investments.
The first step is to understand where your money is going. Almost all of the financial planners interviewed by Fortune recommended going through recent credit card and bank statements so you can see exactly how you’re spending your money, and how that spending compares to a few months ago. Once you have your spending categorized, it’s easier to see where there is room to cut back, or where to redirect more funds.
“Write everything down,” says Lisa Fischer, chief lending and growth officer at Misson Lane, a financial company that helps people rebuild their credit. “Whether it’s scribbling in a notebook or typing out an organized list, keeping a detailed record helps you visualize your cash flow and cut down where needed.”
After you’ve done that, here are seven more tips from financial planners to help you get by when prices go up. 1. Ask for a raise
Workers have more power in today’s job market than they’ve had in quite some time. Use that to your advantage .
“You have the most abundant job market in your lifetime available right now,” says Matt Atwood, a certified financial planner at TimeWise Financial. “Ensure you are compensated fairly for your role.” Do your research, using a site like Payscale, to see how your salary compares to others in your industry.
At the very least, ask for a cost-of-living adjustment in line with price increases—ideally around 10% or so to keep up with inflation.And if your boss can’t or won’t increase your pay, it might be time to update your résumé and look for something new. Though it’s impossible to say for how long the job market will so good for employees, it never hurts to see what else is out there.
“If your request [for a raise] is not met with a fair response, then use this labor market to your advantage,” says Atwood. 2. Try meal prepping
It’s not for everyone, but meal prepping—setting aside a block of time to make a few days’ or a week’s worth of meals with the same ingredients—can help save money on groceries, food waste, and on Uber Eats when you’re too tired or time-strapped to cook.
“I recommend checking out the r/MealPrepSunday sub on Reddit and knocking out your cooking on Sunday to take stress off your workweek,” says Atwood. The subreddit often features ideas for “diverse flavored meals with similar ingredients to limit the monotony of eating the same thing all week.”
There are also countless videos on YouTube for budget-friendly meals . 3. Keep (or start) investing
It might seem counterintuitive to invest when the market is dropping. But it’s actually an opportune time for anyone who’s not close to retirement to invest their money.
“Historically, investing is the best hedge against inflation, and you have time on your side,” says Atwood, speaking to Gen Z and millennial workers.
That doesn’t mean going all in: Workers of all ages should have at least three to six months’ worth of living expenses socked away in a savings account in case of emergency. And if you don’t, you should be working toward that goal. Even putting away a few bucks a week can help your savings grow.
But don’t keep too much cash on hand, says Tyler Martin, certified financial planner at Stonebridge Wealth Management.”Excess savings are losing their purchasing power,” says Martin. “The market is on sale right now.” 4. Know where your efforts will have the biggest payoff Yes, prices are rising, but not uniformly. The inflation rate is measured by the Consumer Price Index, which is comprised of a basket of goods, including housing, energy, groceries, transportation, […]
source Inflation is busting everyone’s budget. Try these 7 money-saving strategies
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