Money Management Strategies during Inflationary Times

February 22, 2022

The inflation reading from January 2021 – January 2022 was a whopping 7.5%.  As a result, inflation worries are now a leading cause of financial anxiety for many households. Everything from groceries, gas, furniture, and used cars has spiked in cost.  However, there are strategies you can implement right now to lessen the financial bite straining your day-to-day finances. 

Here are some tips to help you alleviate the cash flow crunch you might be experiencing during these inflationary times. 

Household Expense Strategies 

Ease the budget pinch on the goods you buy by seeking lower-cost alternatives. Often time generic brands carry the same or very similar ingredients and quality than brand names. Be discerning about the value you are getting for the price of any product. You can find a great list of ideas, here. 

Use an expense worksheet to organize your expenses. Or, if you are more of a technophile, MINT, YNAB, and PocketGuard are good places to start. Then one by one, seek out an alternative, comparison shop, or take an opportunity to eliminate something you don’t need. You can use some of these examples to get you started. 

Put subscriptions in check. Run a check on your subscriptions to eliminate the ones you rarely use. Apps like Truebill, AskTrim, Pocketguard(Also a budget app), and MINT (Comprehensive budgeting app) are popular amongst subscription trackers. You can check out a list with reviews, here.  

Implement these 3 meal hacks: 

1. Cooking 2-3 vegetarian meals per week. This can save you over $60 a month and can yield amazing health benefits.  

1. Consider buying cheaper cuts of meat – they can provide great quality and often better flavor! There is very little a slow cooker or multicooker can’t do! We recently switched to making more boneless skinless chicken thighs versus breasts for the savings and for the flavor. If you are buying non-organic that’s a $3.72 vs ~$2.40 per lb. cost difference, similar savings for organic as well. That can save you over ~$50 bucks or more per month depending on how much you buy. 

1. Minimize food waste. The average American household of 4 wastes over $151 of food per month! Meal planning can go a long way, as well as freezing and/or properly storing food. Finding alternate uses for fruit and veggies that are near expiration dates helps as well. Here are some more actionable ideas to help reduce food waste and save! 

Hold off on larger purchases that are being impacted by supply chain issues. Things like new cars, kitchen, living room, and dining room furniture have inflated in price. Wait for these to level out and keep an eye out for discounts as supply bottlenecks start to ease! 

Financial Expense Strategies 

Adjust debt repayments: If you are making larger than minimum payments, consider temporarily reducing these. If you are already there and need more help, consider reaching out to lenders to adjust minimum payments or to explore deferment options. This can give you some breathing room while you work on the other areas of your expenses to help address shortfalls and get back into a positive cash flow. Here are some tips to guide you there. 

Reduce 401k contributions: If you’ve tried strategies to improve your cash flow and still find yourself struggling to make ends meet – consider temporarily pausing your 401k contributions – try setting a reminder in your calendar for a time to revisit the decision possibly 6 months down the line. Keep in mind that taking this action can negatively impact your retirement planning goals. You can run a retirement estimate like this one to help determine the potential longer-term impact. 

Adjust withholdings: If you are accustomed to receiving a tax refund – it would work to your advantage to reduce withholdings and receive more in your paycheck to address any cashflow crunch issues, plus you aren’t giving the IRS a free loan on your money. Here is a W-4 form guide you might helpful.  

Increase deductibles on your insurance policies and comparison shop: Explore increasing the deductibles on your insurance policies like auto, homeowners, renters, etc. Taking on extra financial risk via a higher deductible will turn into immediately lower premiums. Just make sure you have enough in savings to cover the higher deductible if something does happen. While you are at it – comparison shop to see if you can get even lower premiums from your current insurance company or get them to match lower offers – and explore bundling insurances with the same provider to get steeper discounts!  

Longer-Term Inflation Resilience 

Take meaningful action and invest in yourself and your career. Warrant Buffet has stated that your own career can be the best way to protect against rising prices. It’s not only about what you earn now, but what you can earn in the future. Consider taking free courses or low-cost online courses. You can also work with a mentor to bump up your skill set or learn a new high value skill set. I discussed how this can be the most profitable investment you can make further, here.  

Putting all together 

Inflation won’t last forever, but it can stick around long enough to cause stress that can impact our short- and long-term decisions. Use these tips to help alleviate any immediate financial stress and set you up for the future. If you are having trouble controlling your impulses, or need someone to talk through how to prioritize and apply these tips to your situation, please reach out to a qualified financial planning professional or a financial coach through your employer’s financial wellness program for help!