It doesn’t happen overnight. Inflation creeps up on you.
Slowly but surely, your grocery bill increases. The electric bill gets higher. The Starbucks run you used to treat yourself to before work costs a couple of extra bucks more than it did this time last year.
It might not feel like a whirlwind, but inflation is coming for you.
Millions of Americans are currently fighting back against inflation with smart money moves. Here’s how you can too.
How inflation affects your budget (and how to fight back)
When inflation happens, your dollar can’t stretch as far as it used to. Goods and services get more expensive, which means everything from groceries to gas to rent eats away at your budget.
The U.S. Bureau of Labor Statistics has shown that household expenses in core spending categories have steadily increased over the last few years. Grocery prices are up. Rent prices are up. Insurance premiums are up.
“Inflation sneaks up on you by slowly increasing the cost of everyday expenses people might not immediately think about,” personal finance expert Lynnette Khalfani-Cox tells Daily Bread.
But it’s those little expenses that add up. Maybe you’re spending an extra $30 per month at the grocery store. $15 more on your electric bill. $10 more per month on various subscriptions.
You might not blink twice at these small expenses, but over time, they can devour an extra $600+ per year of your budget.
Top places you’ll feel inflation the most
Here are the top household spending categories where inflation has hit the majority of Americans the hardest:
Groceries and food at home
While food-away-from-home prices have stayed flat, grocery prices at home have increased, with some essentials like eggs, bread, and dairy seeing the biggest spikes.
Rent or housing
Rent is still above pre-pandemic levels in many major cities around the country. If you rent your home or apartment, you’ve likely felt the pressure.
Gas and cars
Gas prices impact more than just your trips to fill up the tank. More expensive gas means more expensive goods being shipped to stores.
Car, rent, and health insurance premiums
The price of insuring your home, car, and health has also increased.
Utilities
Electric and gas bills are up across the country.
How you can fight back against inflation today
The best way to fight inflation? Stay one step ahead of it. You don’t have to completely change your finances to keep inflation at bay. Small improvements over time can make a big difference.
Make budget checking a monthly habit.
Inflation is constantly changing, which means your budget should too. Carve out 15 minutes a month to review what you spent versus what you budgeted to spend.
Trim back on subscriptions.
Most households could trim back on unused subscriptions and recurring expenses. Take stock of what you’re paying for and cancel or pause memberships you don’t use.
Buy the things you use most from warehouse stores.
Warehouse stores like Costco let you combat inflated prices by buying larger quantities at a fraction of the cost.
Take advantage of price matching and cashback apps.
Coupons are a thing of the past, but cashback apps like Ibotta and Rakuten allow you to earn money back on purchases easily. You can also ask your local grocery store about price-matching policies or sign up for their rewards program.
Start building your emergency fund.
If you don’t have at least $500 to $1,000 saved for a rainy day, start there. Inflation can turn a small “oops” moment into a financial catastrophe without an emergency fund to tap into.
“The households that come out best during periods of high inflation are not always the wealthy ones. They’re the ones who are prepared,” financial advisor Ric Edelman explains.
Inflation is here. Don’t sit idly by as it attacks your budget
Inflation affects everyone from all walks of life. It isn’t going away tomorrow, but that doesn’t mean you can’t fight back against it. With a few small money habits, you can reduce the impact inflation has on your wallet.
Learn how to take control of your finances with free resources and tools at our website. Discover how to trim your budget, build your emergency fund, and find food assistance programs in your area.