How to Save Money with Inflation: 12 Practical Tips for Weathering Rising Prices

How to Save Money with Inflation: 12 Practical Tips for Weathering Rising Prices

Prices have been rising rapidly, and inflation rises are significantly reducing the purchasing power of your savings. Inflation has risen 6.7% in 2023 on top of last year’s big jumps.

With costs up across the board, from groceries to gas to housing, you need to get strategic with budgeting and saving to maintain your standard of living. This article outlines 12 practical ways to maximize your dollars even during periods of high inflation.

Explore Options to Lower Debt Costs

With interest rates rising and high-interest debt everywhere, you may be unable to refinance debts like your mortgage or student loans at a lower rate currently. However, some other debt-relief options exist. Speak to your lenders about consolidating multiple debts into one monthly payment through a consolidation loan. This can make managing bills simpler. Or request to go on an income-based repayment plan which sets monthly dues as a percentage of your earnings.

Get Aggressive About Paying Down Credit Card Debt

Credit card interest rates are painfully high, often 15% or more. This debt can quickly snowball and become unmanageable if you only make minimum payments. Get aggressive about eliminating credit card balances to save on wasted interest charges.

Take on a part-time job or side hustle like dog walking, delivery driving, or tutoring to earn extra income that can be applied directly to credit card balances.

If possible, transfer the balances to a 0% introductory APR card to pause interest accrual. Commit to paying off the full amounts before rates spike back up. Destroy the old cards and vow not to take on new credit debt that will just restart the painful cycle.

Attacking credit card debt with focused intensity can provide big savings wins. The key is staying disciplined and knocking it out quickly before high interest eats away at your hard-earned money.

Reduce Energy Use and Costs

Reduce Energy Use and Costs

With home energy prices rising throughout 2023, monthly bills take more and more of your paycheck. It’s hard to make major changes to your home situation. However, try using less electricity and gas to lower utility bills. Simple conservation steps like turning off lights, sealing drafts, and adjusting your thermostat can help. Also shop electric and gas suppliers for the best rates, since pricing varies. If you meet income limits, enroll in the LIHEAP program which provides assistance with heating and cooling bills.

Cut Unneeded Fees, Subscriptions and Phone Bills

Audit your recurring monthly expenses to identify fees and services you can cancel. Eliminate unused gym memberships, streaming services, cable TV channels, subscription boxes, and more. These small charges add up.

Eliminate Your Cell Phone Bill

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Eliminating your monthly cell phone bill can be a big way to fight inflation and put hundreds of dollars back in your pocket.

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Use Coupons and Cash-Back When Grocery Shopping

Grocery inflation is projected to rise hit 5.5 to 6.1% in 2023. Buying generics instead of name brands can save up to 30%. Clip coupons from the newspaper or grocery app. Use cash-back apps like Ibotta when you shop. Buying in bulk only makes sense if the per-unit price is lower. Stick to basics like rice, beans, pasta and frozen produce to further slash your spending.

Compare Car and Home Insurance Rates

Compare Car and Home Insurance Rates

Finding cheaper car insurance and homeowners insurance can provide instant savings. Increase your deductible if it makes sense to lower premiums. Compare quotes across insurers to find better pricing. Bundle policies together or take a defensive driving course to unlock discounts. Consider dropping collision coverage on older cars worth less.

Invest Regularly Even During Inflation

Inflation may seem like a reason to stop investing, but markets have historically delivered positive average returns over time that beat inflation. Options like I-bonds and dividend stocks even provide returns directly linked to inflation.

Consider Treasury Inflation-Protected Securities

Treasury Inflation-Protected Securities (TIPS) are a type of government bond designed to provide inflation protection. The principal value of TIPS adjusts based on changes in the Consumer Price Index, so your investment keeps pace with inflation.

You can purchase TIPS directly through or invest in TIPS mutual funds and ETFs. These securities pay interest biannually at a fixed rate set upon issue.

TIPS can help offset inflation risk in an investment portfolio when prices are escalating. However, the interest rate paid tends to be lower than standard Treasury bonds. Weigh the pros and cons with your financial advisor.

Stay invested in retirement accounts, and up your contributions after a pay raise to build long-term wealth faster than rising prices erode it.

Negotiate a Pay Raise or Find a Higher-Paying Job

Inflation continues to outpace wage growth in 2023, leaving consumers with less purchasing power. Ask for a raise or salary bump so your income keeps pace better with expenses. Research pay at other local employers or competitors in your industry to advocate your value. Changing jobs for higher earnings may be necessary. Even a few dollars per hour more can make an impact.

Scale Back Discretionary Spending

With essentials like food and housing eating up larger budgets, cut back on non-essentials. Limit dining out, premium cable packages, memberships, travel and shopping. Distinguish needs from wants – making coffee at home versus grabbing Starbucks daily can provide big annual savings. Avoid unnecessary bigger purchases that aren’t urgent when money is tight.

Set Up a Savings Account to Pay Yourself First

Set Up a Savings Account to Pay Yourself First

Make saving a priority by setting up a separate high-yield savings account and automatically transferring a portion of each paycheck into it. This “pay yourself first” mentality ensures you save before spending on wants. Even better, have your side hustle or part-time job earnings directly deposited into this savings account.

Online Banks

Online banks tend to offer the best interest rates on high-yield savings accounts. Try to find one offering at least 4.2% APY or more. This provides a return on your money while keeping it accessible as your emergency fund.

Local Bank or Credit Union

While online banks tend to offer the highest savings interest rates, there can also be advantages to setting up your savings account at a local bank or credit union branch. You may get more personalized service and more convenient access to your money.

Local often invest back into the community, and credit unions are member-owned nonprofits. Check rates at your local branch and compare them to online options as you shop for the best high-yield savings account. Having this cash cushion means you won’t have to rely on credit cards or go into debt when unexpected costs come up. Let your savings earn interest over time and resist tapping it for unnecessary purchases.

Time to Fight Rising Consumer Prices

Using these money-saving tips can help you better manage rising costs and make your income stretch further. The key is adjusting spending habits. With strategic money management, you can overcome inflation and build financial safety.

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