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    How to Budget for Inflation
    How to Budget for Inflation

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    he cost of goods and services soars daily, and only one thing can explain it; Inflation! Everything seems to stretch our budgets, from groceries, gas, bills, food, and clothing to rent and airline tickets. Fun fact; inflation is at an all-time high, reaching 9.1% for the first time in more than four decades. 

    With the current inflation rate, you’ll need an additional average of $635 to run your household. It can be super frustrating when your purchasing power keeps going down, but the good news is that there are excellent ways to budget for inflation. You’re in the right place if you’re looking for ways to fight back against this rapid inflation rate when shopping for groceries and paying bills.

    Is Inflation Good or Bad?

    Inflation is an economic situation where the price of commodities goes up, and it affects your purchasing power. It is important to understand if it is good or bad. We’ve seen a steady annual inflation rate of 3.27% on average until COVID-19 when inflation peaked. While a slow but steady rise in inflation is ideal for economic growth, a rapid rate increase can dampen your budget and strain your paycheck. 

    For instance, the current record-breaking high inflation rate has blown up the cost of groceries, making it 10% more expensive to cook in your kitchen. 

    High inflation rates can be good news for someone with a fixed mortgage rate, stocks, and commodities like gold. Conversely, high inflation can be bad for someone taking credit card debt, buying a new home, saving money, and having a variable-rate mortgage and long-term bonds. 

    Will The Inflation Go Down, or It’s Going to Get Worse? 

    Economic experts predict that the inflation rate is going to get worse. When analysts expected the rate to hit 9%, it reached a never-seen-before rate of 9.1% in June. And this means you need to brace up for further price increases on commodities, rent, electricity, credit, gas, and more. Technically, inflation may not go down until the supply chain streamlines.

    The current inflation surge stems from government spending, the war in Ukraine, and COVID-19. Until the impacts of these events lessen, you’ll have to shell out more money for the same items, revamp your spending or drop some of the purchases off your list.  

    How to Budget for Groceries During Inflation?

    The unforgiving inflation rate can strain your budget, causing you to dig deeper into your pocket for typical everyday expenses. A budget for inflation can help you create breathing room during these tough economic times. Below are excellent ways to budget for your groceries during inflation.

    1) Tap on Your Cash Back Credit Cards for Grocery Shopping

    One proven strategy to beat the scorching inflation is to get cash back on your groceries. Pay with the right credit card, whether shopping online or in-store and get money back or rewards. There are many excellent card options for grocery shopping besides generic cashback credit cards. 

    You can recoup up to six percent money back if you shop with credit cards like Amex’s Blue Cash Preferred. Furthermore, these cashback cards can earn you rewards when you make other purchases, like pump gas—this is where it hurts the most during inflation. You can redeem your card rewards for statement credits and gift vouchers or use them to purchase other things. We have a comprehensive round-up of the best cashback credit cards for Grocery Shopping.

    2) Consider Store Brands

    Are you flexible with brands? If so, switching to store brands can be the best idea to combat the current inflation rates when grocery shopping. The cost of premium brands can blow up faster during inflation than store brands. Inflation erodes your buying power, meaning you’ll get fewer name-brand items for more money. Let’s face the facts; household name brands require astronomical marketing budgets to be famous, and they will pass this cost to you at the store. On the other hand, generic store brands don’t incur these huge costs and are affordable. Some of the items you can buy generically include milk, fruits, vegetables, meat, snacks, cleaning products, diapers, personal care products, cereals, baking supplies, gasoline, and baking supplies. 

    3) Plan Your Meals

    Planning your meals is another excellent way to budget for groceries during inflation. A meal plan can help you shop within your budget and cook just enough food to avoid food wastage. Create a list of essential ingredients you’ll need to prepare meals throughout the week. Additionally, strive to shop for your food when they’re on offer, and don’t forget to get your favorite food ingredients in bulk. 

    4) Hunt for Deals and Coupons

    The inflation pinch is painful, and a little discount can go a long way. Look for deals and coupons before adding your grocery items to the cart. Couponing is a straightforward way to save money on shopping during inflation, and it requires you to strategically plan your shopping around your store’s offers and deals. 

    If you have your favorite grocery store app, you can check out the offers available and capitalize on them. Alternatively, there are excellent couponing apps for grocery shopping deals you can consider. For instance, an app like Ibotta makes it seamless to search for grocery deals in various stores in one go. You can get a dollar value or a percentage off items at the store of your choice. 

    Another option for you is RetailMeNot and Rakuten, where you can get offers, rebates, and promo codes for various products and shop at different stores. 

    5) Avoid Impulse Buying

    Impulse purchases can put your grocery budget off balance, leaving you with little to nothing to save. It can be quite stressful to be unable to explain how you spent your money. One excellent way to avoid impulse buying is to take an inventory of your items and create a list of what you need. Stick to your list no matter what offer/deal comes into your inbox or see at the store.

    Also, keep your credit cards out of reach to avoid unplanned use and creating more expensive debt. Avoid shopping when you’re hungry; you might make unnecessary purchases. Don’t save your bank card information with your online retail stores to avoid impulse buying. 

    6) Consider Seasonal Produce

    Buying produce -fruits and vegetables in season is a great way to get more groceries for less because they’re cheaper than when out of season. Visit your local farmers’ market to keep tabs on the produce in season and be strategic about the time to go to the market. Most sellers slash their produce prices around closing time, giving you the perfect opportunity to snag deals on fruits and vegetables. 

    7) Shop the Freezer

    Shopping the freezer aisle is another excellent way to budget for inflation. The frozen food is pocket friendly yet just flavorful as fresh produce. You can find out-of-season produce in the frozen food section at a fraction of the price. Also, it is cost-effective to stock your favorite frozen ingredients, and they maintain their freshness and flavor, unlike fresh produce. The best part is you can save a lot of time on meal preparation for yourself and your family. Bulk buy your favorite seafood, chicken nuggets, chicken strips, meat, spring rolls, frozen dairy products, fruits, and vegetables, pasta, rice, and anything you can find in the freezer aisle.

    8) Buy in Bulk at Warehouses

    Buying items in bulk is an excellent saving strategy, and the best place to get the biggest bang for the back is shopping at a wholesale store. Try wholesalers like Costco, Sam’s Club, or BJ’s Wholesale Club to get a better price than you would at regular grocery stores.

    9) Buy Reusables

    You might not realize it, but disposable or single-use items can cost you a couple of dollars per day. Bring your reusable grocery bags and ditch the plastic baggies. Additionally, there are excellent sustainable options for paper towels, plastic wraps, and paper napkins. You can save and channel the money into buying something else, like food.

    How to Budget for Bills During Inflation?

    You must pay for utilities to run your household seamlessly, but it can be quite challenging when inflation is sky-high. Below are ways to budget and save money on bills during inflation.

    10) Use BillCutterz to Find Discounts

    One way to save on your monthly bills is to find discounts and negotiate with your providers, and BillCutterz can help you. Bills like electricity, insurance, auto loans, cable, internet, home security, cell phone, and satellite radio can cost a pound of flesh. BillCutterz can contact your providers and help you negotiate better rates and lower costs, ultimately helping you save money on your monthly bills.

    How does BillCutterz work? First, you’ll need to sign up and share your monthly bills with them. One of their experts will review your monthly payments and ensure you signed up for the right plan. The team hawk-eyes your service providers for the best deals, promo codes, and offers. You don’t have to lift a finger, and you’ll pay discounted bills at the end of the month.

    How much does BillCutterz cost? Well, they can make money only when they save you money, and you don’t pay a cent unless you get bill discounts after using their services. If you save $200 on your monthly bill, BillCutters will take $100 and charge zero fees if you don’t save anything. 

    11) Create Your Budget and Pay Bills using Quicken

    Monthly bills can stretch your dollars, and only a budget can help you stay on track. Creating and tracking your bills’ budget is an ideal way to be on top of your payments. It helps you account for your money, combats bad spending habits, and identifies some bill payments to re-evaluate. Furthermore, tracking your bills can help you discover more ways to cut costs and be on top of inconsistent and unexpected bills. 

    Try Quicken, a perfect tool to help you budget, pay and track your monthly bills. You can also add your accounts and automate your bill payments.

    12) Be Efficient and Strategic with Your Electricity

    Your electricity consumption can affect your monthly expenses, and the slightest waste can jeopardize your finances. Energy Star averages the cost of energy consumption to be $2,000 per year. Consider getting a smart or programmable thermostat to help you control your electricity consumption. Heating an empty home can be an expensive mistake, and a smart thermostat ensures that you set your system to the right conditions at the right time.

    A water heater can consume tons of energy, translating into a huge bill. You can minimize electricity consumption here by turning down the temperatures in your heater. 

    Another thing to consider is your lighting system. Get energy-saving LED lights or fluorescent lamps that consume less energy and last longer. Use the fan to cool your home and save on utilities during unforgiving hot summers.

    13) Cut unnecessary Subscriptions

    Review your budget and identify unnecessary subscriptions. Cancel subscriptions you don’t need and swap others for a less costly plan. For instance, you can get a digital antenna instead of a cable subscription and enjoy your local free channels. Find a streaming service that works for you, and watch your favorite shows. If bad comes to worse, you can cut off some subscriptions you can survive without and save your money. 

    Alternatively, you can pull resources and cost-share subscriptions with your friends. If you can do this with your friends and family in different time zones, you can save money and still enjoy your entertainment. 

    14) Lower Mortgage Through Refinance

    SoFi can help you find the best mortgage refinance rates to lower your monthly payments. You can compare the rates and monthly payments to get one that matches your financial goals. Locking in a lower rate ensures you channel more money to your mortgage principal and less towards the interest.

    Best Proven Ways to Budget for Inflation

    Inflation is out of control, but budgeting your money doesn’t have to be. Hopefully, the above tips can help you score big on your budget and survive through this high inflation rate season.

    We love sharing tips to help you budget your money and achieve your money goals. We’d hate to see you miss these excellent tips; Sign up for our newsletter and get the best resources sent straight to your inbox.

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    "The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind."

    T.T. Munger

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