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In case you haven’t heard, inflation is on the rise, after more than a decade of little to no inflation. According to some economists, we can expect this surge of inflation to last at least through the next decade. It could be longer than that. Financial gurus have been warning us about this economic meltdown since the Great Recession, so we really shouldn’t be all that surprised.
There’s nothing that you or I can do to stop this from coming; but there’s a lot we can do to prepare ourselves for it. We can weather it fine, if we prepare. Mostly, that means cutting our expenses so that as prices rise, we don’t hit a point where our outgo exceeds our income.
Let me just say here that the average American family spends 110% of their income, covering the rest with credit cards. That’s obviously dangerous and especially dangerous in rough financial times. The people who suffer the most are the ones with too much outstanding debt.
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So what can we do?
1. Cut Subscription Services
One of the more recent “have to” expenses that are showing up in a lot of our bank statements is subscription services. It seems that everyone is trying to get in on the game of getting a piece of our paycheck sent to them automatically, every month. Software is now sold as a subscription, movie channels are subscriptions, and perhaps the most dangerous is subscription boxes where someone curates a box that they send you every month, charging you more than the contents are worth.
I can see where some of these might be beneficial or desirable, but you might be surprised at just how much you could be giving away every month to these services. Some of them might even be things that you don’t know you’re paying for. Those have to be the first ones to go.
For software, try buying an older version of the software which you can actually install on your computer. In most cases, the newer versions don’t give you anything you really need, just a few more bells and whistles. If you don’t need those, why pay for them? You might also consider using a free software service like Google’s suite of office applications.
In the case of subscription television, pick one or two that you really use and get rid of the rest. After a while, when you’ve seen everything you want to on those services, cancel them and sign up for something you haven’t seen in a while. By rotating them in that manner, you can reduce your overall cost while still enjoying your movies.
2. Turn in Items Bought on Time
We’ve become a society that buys things on time, making monthly payments on furniture, televisions, and who knows what else. But not all those things are necessary. I understand wanting a larger television or a new sofa, but if you don’t have the money, wait until you do.
But what do you do if you already have those items? How can you get out of the payments? Well, you can always take them back to where they came from, asking for a refund. Even if they don’t give you a refund, you can always leave it there and stop making the payments. Find something less costly to use, even if it means doing your shopping on Craig’s List. I’ve gotten some great furniture deals there.
3. Downsize Your Car
I can’t believe how expensive cars and trucks have become. I drove a pickup truck in a parade a couple of years ago that was more expensive than the house I was trying to buy at the time. Payments on those vehicles can be even higher than house payments because car loans are for six or seven years, not 30 years.
While it’s great to have a nice car or truck to drive, it’s not a necessity. I’ve mostly driven old vehicles all my life and have driven them until they were ready to go to the junkyard. The old adage of “you make car payments or you pay for repairs” isn’t really true, as the car payments are a whole lot higher than the repair costs will be, especially if you know how to do your own mechanic work.
It’s contrary to the way people think today, but you can save a lot of money buying cars based upon what you need, rather than what you want. I’ve never owned the cars I want; but I’ve always had decent cars to drive, even if they were a bit old. Better yet, they couldn’t be repossessed.
4. Move Into a Less Expensive Place
Now isn’t a good time to be looking for a house to buy, but if you’re renting, you might want to consider downsizing, especially if you are renting a large expensive home. While there are parts of the country where there is currently a housing shortage, there are also many other areas where you can still get rentals at a decent price.
Quit worrying about keeping up with the Joneses or your co-workers and find something that provides your family with what you need at a price that leaves something extra in your bank account.
5. Reevaluate Your Eating Habits
It's amazing how much the average family spends on food every month. While food is usually one of those things with the highest inflation rate, many of us are outspending that inflation rate.
Two big things tend to drive up our food costs: buying prepared food and eating out. Some prepared food may actually be worth what it costs, but I’ve seen an awful lot of things that went for double just because they had some spices sprinkled on them.
I’m specifically thinking about chicken leg quarters that sold for double, just because of the addition of the spices. It’s a whole lot cheaper to buy a bottle of the spice mix yourself and really doesn’t take long to sprinkle it on.
Restaurants costs, even fast-food restaurants, have risen considerably and will continue to rise. Fast food is no longer the bargain that it used to be. You’re going to spend $10 or more per person going to just about any fast food restaurant. For that, you could go for a much better sit down meal. But don’t do that all the time; consider how often you eat out and try to limit it to once a week.
One thing that can really help is to do bulk cooking, making large batches of food so your family can eat it for several meals. Some people are a bit picky about this, but you can still make multiple meals out of it by freezing it and bringing it back out later. Those prepared meals make things much easier when you’ve had a rough day and don’t feel like cooking. Plus, they’re a whole lot cheaper than that trip to the local burger joint.
6. Get a Cheaper Phone Plan
How much are you paying for your phone? Many plans today run $100 for talk, text, and data. While you’re probably using all three, are you using all that you’re paying for? Not only that, but are you getting the best possible price for the services you need? When was the last time you compared prices?
7. Quit Smoking & Drinking
If you smoke or drink regularly, take a look at how much you’re spending on those habits, especially drinking at bars and restaurants. Many restaurants make their money off of drinks and desserts, not the main courses. They’ll charge the same amount for a glass of wine that they pay for the whole bottle.
I’m not saying you have to stop drinking altogether, just stop drinking when you’re away from home. Buy beer and wine and keep it at home. Then you can have your drink either before or after dinner. You’ll save a lot of money while still being able to enjoy yourself.
Of course, if you’ve got a six-pack a day habit, you might want to consider cutting back. You really don’t need that much beer to retain your health and if you think you need it to retain your sanity, I’d like to suggest that you take a good look at your life. It sounds like you need to make some other changes.
By the way, restaurants overcharge for iced tea and soda as well. Charging $3 for a drink that costs about one sixth of that in the grocery store seems a bit excessive. And remember, they’re getting it much cheaper than you can buy it at the grocery store. I stopped ordering any sort of drinks at restaurants years ago, doing all my drinking, from tea to soda to whatever, at home.
8. Cut Bag on Entertainment Expenses
We’re a society that’s become addicted to entertainment, to the point where it has become a major expense for many families. Somehow, that has become out of balance in many cases. I don’t know how much you’re spending on entertainment, but take a look at it. Ask yourself if what you’re spending is reasonable for your budget. If it seems excessive to you, then you can figure out what you need to change.
Hobbies can be a great alternative to entertainment, especially if your hobby can either save you money or help make you some money on the side. I do woodworking, which can be an expensive hobby; but when we total it all up, I save us more money through the things that I make than what it costs.
9. Quit Wasting Energy
I’m going to end with what everyone starts with, saving energy. There are lengthy articles written about the things you can and I can do to save on our energy costs. Some are simple, like changing over to LED light bulbs. Others take more work, like adding insulation to the attic. Regardless, they are pretty much all worth doing and will help you to save money on your monthly energy bill.
One thing I’d like to mention, which few people bother with anymore, is adjusting your home’s heating. If you’re trying to keep your home at a nice comfy 75 degrees F in the wintertime, you’re spending more on energy than you need to. Set it at 73 or 72 and have everyone wear sweaters.
Likewise, in the summertime, set it at 78 degrees and use fans. Shut off rooms that aren’t in use, heating and cooling only the parts of the home where people actually are. A programmable thermostat can help with this.
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