How to Save Money During Inflation In 8 Simple Steps

how to save money during inflation

Inflation has taken its toll — not only on the people of the United States but also in other parts of the world. People are aware of its impending effects on the economy. 

Around 70% of Americans already view inflation as a major problem countrywide. Who wouldn’t? The budget you set aside for emergencies could be exhausted due to your loss of purchasing power. 

Your bills could get bigger — big enough to exceed your wages. This is a giant financial hurdle you should overcome before it becomes too late for your wallet. 

But how? 

For starters, learning some pointers on how to save money during inflation is a must. You can’t control inflation, but you can definitely control what goes in and out of your pocket. 

Sometimes, people underestimate the power of proper budgeting. Educating them about it is crucial to avoid bankruptcy and a decrease in life quality. 

With no further ado, below are some pointers you may want to list down for present and future reference on how to save money during inflation.


1. Prioritize Your Savings

Spending your money in one go is a lot easier than setting aside a certain amount for savings. Payday can make you feel euphoric to the point of over-spending on things that are not as important as you think. 

If you’re as guilty as anyone about this particular scenario, then you may want to set aside a particular amount from the get-go. You have to make sure you’re comfortable setting those amounts aside.

  • Doing this will help you live within the bounds of what you can afford at the moment. This will help you avoid overspending since you won’t have total control over the amount you set aside. 
  • Practicing this technique should involve certain variables like your household size, total income, and your saving goals. For starters, you can start with this ratio: 60% of your income goes to your necessities including bills, 20% to your wants, and 20% to your savings. 

Does this sound feasible to you? 

Remember that there are no set rules for saving money. This kind of ratio may not be realistic for others, especially those who are currently living paycheck-to-paycheck.

It’s always advisable to start early and slow to see results in the long run. Inflation can happen anytime, and being prepared is key. 

Budgeting apps can also help you monitor your expenses and keep track of the percentage you’re spending on specific things such as energy bills, car insurance, and many more. 

Inflation or no inflation, prioritizing your savings will always be important for every household.


2. Watch Your Energy Consumption

Take a look at your electricity bills, and compare them with your other bills. Can you see the huge gap between them in terms of the amount? 

Energy is one of the most significant drivers of inflation. When you see how energy sources such as natural gas, coal, electricity, and oil are rising, you’ll notice that inflation is about to happen. 

This is because energy companies pass the increasing prices to their consumers. Consumers can’t do anything about this except pay their bills every month. 

Budgeting for these higher costs can be challenging — but not impossible. You’ll simply have to audit the energy you’re using in the household and curb the expenses as much as you can. 

The U.S. Department of Energy shared these tips on how to reduce energy consumption at home: 

  • Purchase energy-efficient lighting: Turn the lights off when they’re not in use. You can also incorporate more “daylighting” into your home. This means purchasing energy-efficient skylights and windows. 
  • Purchase energy-efficient appliances: You can use an advanced power strip when operating your appliances to avoid standby power, which is the energy consumed when appliances are at rest but plugged in. 
  • Buy an Energy Star heat pump for your water heater: Operate this appliance efficiently, and turn off the heater during warmer months. 
  • Use energy-efficient heaters and coolers: You may also incorporate passive solar design systems into your households, such as proper insulation and energy-efficient windows.
  • Watch out for standby power: There could be appliances in your home that are “always on,” and this might count against your energy meter. Plug off appliances that are not in use such as your television, or dispose of that extra refrigerator you barely use at home. 

Try these tips and watch your energy bills decrease by next month. If you’re still struggling with paying your energy expenses, try contacting the Low Income Energy Assistance Program

If you’re eligible, they can provide financial assistance in paying your heating bills. 


3. Be Open to Investing 

Investing is one of the best shields against inflation. If you try investing some of your funds in low-risk investments, you may end up reaping riper fruits in the long run. 

You may think that investing while the prices are at an all-time high is a bad idea. Who puts a huge chunk of their funds into the stock market while prices are still skyrocketing? 

People who know how to handle their finances do.


Whether you’re investing for your family, retirement, or other matters, these regular contributions we call investments can sustain you for a lifetime. After all, the primary reasons people are investing include increasing their purchasing power and beating inflation. 


If your means are limited, and you can only contribute so much monthly, you can always reduce your contributions temporarily. Once you bounce back from this problem, feel free to increase your contributions. 

You can try investing in dividend-paying stocks. This kind of investment involves a share in a company’s profits; since some of these companies actually use inflation to their advantage, they can realize larger profits more effortlessly.

Through that, you can gain dividends. There is no better way to learn how to save money during inflation other than by creating a steady stream of income.


4. Pay Your Credit Card Debts

If you haven’t paid your current credit card debts yet, then put them down first. Avoid swiping carelessly, especially during this chaotic economic situation we have.

Affording your expenses does not require you to take on debts. Instead, you can rely on emergency savings. 

Credit card debts can be difficult to pay — especially if your debts are also on the verge of an avalanche. Plus. you have to get rid of them by making bigger payments at a time. 

This can be difficult without proper planning. 

This is why you have to put a debt repayment strategy in place. Two of these strategies are the debt avalanche and debt snowball methods. 

You may also consider a balance transfer credit card that can help you save on interest and consolidate your debt more efficiently. Remember that this should have a 0% introductory APR to help you save better. 

Finally, you can consolidate your credit card debts into a single loan. This way, you may be able to pay at a lower rate monthly. 

You have to make sure that your credit standing is reputable before filing an application form. To avoid more debts in the future — especially during inflation — avoid using your credit cards until you’ve paid your loans.


5. Hunt for Cheaper Alternatives

One way to beat inflation is to become more creative and flexible with your shopping options. You don’t have to stick to a particular store or brand for life, and this especially applies to buying groceries. 

  • Exert more effort into comparing prices between brands and stores. You can first check local produce or goods — because most of the time, they come cheaper than imported ones. You’ll be surprised at how there’s not much difference between the cheaper alternative and the brand you’re used to in terms of quality. Expensive doesn’t always mean better.
  • Aside from the brand, you may also substitute certain ingredients with more cost-effective alternatives. An example of this is using oil instead of butter when cooking certain dishes.
  • Try shopping in bulk stores to stretch your budget a little farther monthly. This is ideal for families who are trying to evade the impact of inflation. 

Acquiring these vigilant habits will not only help you during inflation but also when budgeting efficiently for you and your family.


6. Review Your Insurance Premiums

Take an hour of your day to review your insurance bills. Assess them properly for unnecessary policies or provisions in the contract. 

There are certain strategies for decreasing your insurance premiums. Some of them are by paying upfront, increasing deductibles, and bundling services. 

Aside from these strategies, look for possibly unnecessary add-ons, services, or subscriptions in your premiums. You can unsubscribe or terminate programs you don’t need at the moment. 

You can dedicate these amounts to more important matters such as your needs and household bills. Cut everything you deem unnecessary, and breathe better financially.


7. List Your Priorities

At the end of the day, budgeting wisely will always involve prioritizing. Remember that you’re not only dealing with ways to combat inflation but also keeping your priorities intact during these trying times. 

You may not have control over the country’s economic conditions, but you can control your spending and saving habits. The best way to avoid deviating from your priorities is also to avoid debts. 

Once you have total control over your expenses, you’ll be surprised at how inflation won’t impede your priorities at all. Compartmentalize your budget, and ensure that all your priorities are well-covered.


8. Be a Member of a Credit Union 

During these difficult times, a credit union can help you bounce back and gain more financial freedom even during inflation. By becoming a member of one, you’ll actually have a supportive, not-for-profit group you can count on.

You can always count on 121 Financial Credit Union to help you get by during various economic situations. We offer no-cost and low-cost financial products to help you achieve your goals.

Aside from the wide range of financial services we offer, we also offer free financial counseling and free investment and retirement planning. We want our members to become more proficient in terms of financial management because we care about them.

On top of these, you can attend our free seminars, free participation in the Jacksonville Jumbo Shrimp Games or Member Day (never miss this for the world), and our exciting branch-in giveaways and more events. 

We value our members, and we always strive to treat them with respect, care, and dignity. This is how we operate at 121 Financial.


Let’s Chat About Your Finances Today

If you have more questions or are curious about us, you can call us at (904) 723-6300.

Upon reading all of these tips for combating inflation, you should take these steps to keep yourself and your family financially secure. We are always here to help you stay afloat at all times — inflation or no inflation. 

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