Inflation-Proof Your Budget

We’ve all felt it these last few years. Inflation. It’s becoming one of my least favorite and yet somehow, often used words. I remember when my grocery, all household products, baby products, and eating out budget used to be just $500 for a family of 5. Gone are those days.

It seems like everything at the grocery store has gone up a ton in price. Oatmeal has doubled in price. Milk and pantry staples have gone up significantly. We have always been a frugal family, so I’m not even talking about luxury purchases. Everything from restaurants, entertainment, or big ticket items like vehicles and houses have priced many people out of the market.

While we don’t know exactly when inflation will cool off or if prices will ever cool off to their pre-pandemic days, here are 10 tips to inflation-proof your budget.

1. Review your budget and highlight the 1-2 areas where you might be overspending or having trouble staying within the parameters you set. If you don’t yet have a regular budget you operate within yet, step 0 is getting that setup, pronto! Costs have gone up, but has your budget adjusted for these added expenses? Or have you just assumed you’re good and lost track of the real cost of things recently?
2. Buy used or maintain the things you have for as long as you can. With inflation rampant, now is not a great time to be upgrading long-term purchases. If you can hold off a few more years, wait (and save) for a new car, a home renovation, that overseas trip you’ve been wanting to take, or a new appliance. Before you call in backup, try looking on Youtube for any repair jobs to see if it’s possible to DIY and save some money.
3. Cut spending on everything unnecessary. One of my favorite books from this last year was The Year of Less by Cait Flanders. This book really encouraged me to see that stuff often gets in the way of the freedom I’m truly craving. While it might seem more freeing to be able to buy anything you want with the drop of a hat, true freedom comes with less. Do you need another outfit? Is it possible to brew your own coffee or make cold brew at home? Can you find free or cheap entertainment alternatives? Where can short-term sacrifices help you achieve your long-term goals?
4. Find creative ways to earn some extra cash. Whether it’s cash back on the credit card for purchases you’d still be making or picking up a side hustle, earning extra money sometimes feels less restrictive than cutting back all together. Just remember, there is a trade off of time and money if you choose to work longer hours.
5. Focus on having 3-6 months of expenses stashed away in an emergency fund. Whether or not inflation is high, having a fully-funded emergency fund will help in case of unexpected expenses, a job loss, or spending more than budgeted in a specific area.
6. Dump debt. You already know my thoughts on debt, not a fan! Work hard to eliminate debt so those monthly payments aren’t eating into your disposable income. Higher usable income equals more money to weather the storm of inflation. A note about credit card debt: with rates being higher right now, credit card companies are passing this along to consumers. Please, please, prioritize interest rates of 10 or more percent first.
7. Utilize high yield savings accounts for any sinking funds and/or emergency funds to maximize savings for your budget.
8. Renegotiate your bills, if it’s been a bit. Call an insurance broker and have them run new rates on car and auto to see if you can save money. Call your phone or cable provider and ask about extra discounts. Ditch extra subscriptions.If your cost has gone up in the last 6-12 months, it’s worth the 15 minute phone call to negotiate a better bargain.
9. Eat in. I’m amazed every time we eat out just how much everything costs. My husband and I recently went on a date with a gift card and just for two meals, no appetizers, and water to drink, it was almost $40 with the tip. Chick-fil-a for a family our size is at least $30 and that’s just for nuggets and fries in bulk, no drinks or extras.
10. Lastly, save money on food. Use grocery pickup so nothing just “jumps into your cart.” Shop generic. Buy in bulk for larger families for a better price per unit. Meatless meals or meals involving staples such as pasta, rice, or breakfast foods tend to be cheaper. Since this is one of the “big 3” – food, transportation, and housing – saving money here can give you a boost.

How have you had to inflation-proof your budget? Leave me a comment with any other tips or ideas.