Inflation has been a concern for Americans since 2021, and it feels like it’s just not going away: prices rose 8.5% in March compared to the year prior, marking the biggest year-over-year gain in the Consumer Price Index since December 1981.
Controlling inflation is one of the main tasks of the Federal Reserve, who just yesterday announced an interest rate hike of 0.50%, the most aggressive increase made in a single Federal Reserve meeting since May 2000.
What’s going on? In short, elevated inflation is the result of the COVID pandemic waning. There has been massive supply chain disruptions and pent-up consumer demand for goods, with the Russia-Ukraine War adding to existing issues.
Our team has already talked about ways to hedge against inflation through investing, such as I-Bonds, building a bond ladder and dividend paying stocks, which are getting a lot of press right now. But for those who have already taken the proper course in their investment strategy, but are still looking for some money-saving opportunities, here’s a tip or two to stretch your cash.
Create – and Stick to – a Grocery List
Impulse buys are the enemy of your wallet, and it’s very easy to “add to cart” at the grocery store, especially if you’re shopping on an empty stomach. To save yourself from unnecessary purchases – some of which may sit in your pantry until it goes stale – take stock of your fridge and cabinets and make a list of what you need before hitting the road.
There are a number of free, digital apps that you can use to create a grocery list, such as Pantry Check and Out of Milk. You can also go the traditional route and take pen to paper.
The Coupon Conundrum
Although coupons are great if they apply to items you’d typically purchase (ahem, on your grocery list), don’t buy something just because it’s on sale. Jumping on a great deal can be satisfying, but also wasteful, especially if the deal involves buying two to get one free.
Get Cash Back for Shopping
There are a few ways you can earn cash back for your regular shopping, one of which is through cash-back credit card purchases. There’s a slew of credit cards that offer cash back, and depending on the card you use and where you use it, you can earn cash rewards of 1% to 6% of the amount of each transaction. When using credit cards, it’s best practice to pay off the entire balance every month to avoid accruing debt and paying interest charges – which can be quite high for these types of credit cards.
There are also cash-back shopping apps like Ibotta and Receipt Hog that give shoppers the opportunity to earn cash back on select purchases through their app. But, beware: some cash-back websites charge a membership fee, which you should avoid.
The same advice for couponing can be applied here: Avoid making purchases simply because they qualify for cash back. Instead, look for opportunities to save on items you already intend on buying.
Buy Discounted Gift Cards for Shopping and Eating Out
If you’re a regular at a specific store or restaurant, consider purchasing discount gift cards in advance of a visit. These gift cards hold a balance higher than what you pay for the card, and although they’re not typically a blow-out deal, using them at a store or restaurant you frequent can save you money in the long run.
There’s quite a few online websites that sell unwanted gift cards for this specific purpose. For example, in a quick search on CardCash.com, I found an Old Navy gift card with a $30 value for $24.99, and a $25 AMC gift card for $21.70. Other websites, like GiftCards.com and Raise do the same thing, and have received positive reviews from past customers.
Sam’s Club and Costco are also well-known for having discounted items, and the situation is no different with gift cards. Again, the discounts aren’t crazy – oftentimes savings of 5% to 10% – but it’s still worthwhile to check these stores when card resellers don’t have what you’re looking for.
Save Money on Gas By Joining Membership Clubs
Soaring gas prices can have a significant impact on your budget. But you can save a bit at the pump if you become a member of some membership clubs. For example, these places offer fuel discounts:
- Costco: For a $60/month Gold Star membership to Costco, you get access to one of the cheapest places to buy gas in the US.
- Sam’s Club: Become a member for a fee of $45/year and save $0.05 per gallon when you buy gas.
- Walmart: Join Walmart Plus for $12.95/month and save $0.05 per gallon at the pump – which includes Sam’s Club gas stations.
Review Your Subscriptions and Recurring Charges
Netflix made headlines in April after reporting a loss of 200,000 subscribers during the first quarter of this year, which came as a surprise to many as it was the streaming platform’s first decline in paid users in more than a decade. While the company pointed to a few different reasons for the decline, it got me thinking about my subscription to Netflix… and I realized I hadn’t reviewed my subscriptions and recurring charges in a long time.
A report from West Monroe found that Americans spent an average of $273/month on subscription services in 2021, and that amount has increased 15% from 2018 to 2021. That could be a big portion of a person’s discretionary spending!
Review your bank statements to uncover just how much you’re spending on these charges – perhaps you can eliminate what you’re not using or save by switching providers.
Think Through Your Housing Needs
According to the U.S. Bureau of Labor Statistics, the cost of a home was the biggest single expense for most families in 2020. Although relatively low (but increasing) mortgage rates have renewed interest in home ownership, there are many hidden costs associated with a home:
- Property taxes
- Homeowners insurance
- Landscaping and lawn care
- Structural care, like roofing
- Internal care, like electrical, plumbing and HVAC
… and the list goes on.
A residence can definitely be a valuable asset, and creating equity in a home is a path to a more stable financial future, but novice buyers should be aware of the possible, and sometimes inevitable, expenses associated.
Rising costs of goods are squeezing the pockets of all Americans, and while there are actions you can take – in budgeting, spending and investing – it can still feel overwhelming. If you have specific questions about your individual situation, we’re always here to help.