How to Manage Your Money During Inflation

Feel like your money isn’t going as far as it used to? It’s probably not. Inflation is at a 40-year high, and three out of four Americans surveyed say they’re feeling its impact.¹ From the grocery store to the gas pump, just about everything seems to cost more now. So, how can you manage your money during inflation so it hurts a little less? Start with these six tips.

What Is Inflation?

What exactly is inflation, anyway? Inflation occurs when prices rise on goods and services across the board. Essentially, everything gets more expensive—quickly—so your purchasing power decreases.

Managing Your Money During Inflation

While you have no control over how long inflation will last or how high the rate of inflation will get, you can control how you react to it. Start with these must-read tips for managing your money during inflation.

1. Know exactly where you stand financially.

If you haven’t looked at your budget in a while, now is a good time to do so. With rising prices, you may be (unpleasantly) surprised by what you find. Get a handle on your personal cash flow (the money you have coming in versus what you’re spending) recalculate your budget—and stick to it.

2. Cut your spending, across the board.

When budgeting, it’s natural to look at those big expenses first—items like utilities or insurance—but those small expenses can add up, too. Consider how changes in your lifestyle—making coffee at home rather than buying it on your way to work, turning off your computer when you’re not using it, or working out at home rather than at the gym—can help you reduce your spending, too.

3. Plan ahead.

List-making can save you time and money. Create a to-do list before you head out the door and plan your route so you avoid multiple trips and save on gas. Grab your supermarket circular and plan your meals for the week based on what’s on sale; clip coupons and save even more. Meal planning not only will help you cut your grocery bill (which has probably taken a hit during inflation), it will likely cut your takeout expenses, too. Want to save even more? Buy in bulk or go with store-brand options.

4. Consolidate your high-interest debt.

When inflation increases, interest rates usually follow. That means if you have credit cards with variable interest rates, you’re likely to see your interest charges go up, which can make paying off your card balances even harder. Consider transferring your balances to cards with a low or no introductory rate and no balance transfer fees. And don’t rack up new charges – use cash, rather than credit when you can – and keep that budget (see tip #1) in mind.

5. Look for high-yield savings rates.

The one bright spot in the inflation landscape: savings rates have increased. While account rates don’t typically beat the rate of inflation, they’re a far better hedge against it than keeping your money at home. Many financial institutions, including BrioDirect, are offering savings accounts with higher interest rates, which means you can earn more money on your account’s balance.

6. Boost your earnings.

While fairly obvious, the last tip for managing your money during inflation is not so simple: increase your income. Is it time to ask your boss for a raise? If so, be prepared to list your work responsibilities and achievements. Perhaps working from home is an option—you’ll save on commuting costs. Or maybe it’s time to ask for more hours or overtime if you’re an hourly employee. If all else fails, you may need to consider starting a side business or getting a second job. But remember, making more money can take time so first try spending less—and budgeting and saving more.

Want more tips for managing your money during inflation—and when times aren’t so tough? Read how to get your finances in order now.

¹Allie Johnson, “Poll: roughly 3 in 4 say inflation is hurting them financially,” Bankrate, bankrate.com/finance/credit-cards/higher-prices-poll/