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HomeMoney SavingThe way to Survive Inflation and Make it Work for You

The way to Survive Inflation and Make it Work for You

Inflation is right here: it’s massive, it’s in cost, it’s up 8.5% as of March 2022, which is the most important 12-month improve since 1981. Woohoo! Aren’t we fortunate! However all is just not (completely) misplaced as a result of inflation doesn’t influence all costs equally. As we’ll discover collectively right this moment, that is an uneven inflationary interval: virtually the whole lot is costlier, however some issues are hit more durable than others.

What Precisely IS Inflation???!!!

Identical view; completely different seasons. Very similar to inflation: similar product; completely different value

Earlier than we dive into how inflation impacts us on a person stage, let’s spend a while in Liz’s Definition Nook. Inflation is a type of phrases everybody thinks they need to know and assumes everybody else is aware of, however in actuality quite a lot of us aren’t positive however afraid to ask as a result of we assume everybody else is aware of… 

I form of knew what inflation was earlier than this yr–like in very common phrases–however now I’m deeply interested in what it truly is. So let’s bust out some hotttt defs on this child.

In accordance with this text within the New York Occasions:

Inflation is a lack of buying energy over time: It means your greenback is not going to go as far tomorrow because it did right this moment.

I like this definition–quite simple, very straightforward to see the way it applies to our lives. Stuff prices extra however most of us nonetheless have the identical sum of money to spend, which implies we are able to afford much less stuff. It’s not nice, folks, not nice.

What causes inflation? The NYT illuminates:

Within the brief time period, excessive inflation might be the results of a sizzling financial system — one through which folks have quite a lot of surplus money or are accessing quite a lot of credit score and need to spend. If customers are shopping for items and companies eagerly sufficient, companies may have to lift costs as a result of they lack satisfactory provide.

However inflation can — and sometimes does — rise and fall based mostly on developments which have little to do with financial circumstances. Restricted oil manufacturing could make gasoline costly. Provide chain issues can hold items briefly provide, pushing up costs.

Early fall view

Ring any bells???? The pandemic, the disruption to the worldwide provide chain, the warfare in Ukraine and the ensuing improve in oil costs–we form of hit an ideal storm right here for inflation.

It’s additionally partly our fault as a result of:

…customers, who collectively constructed up huge financial savings due to months in lockdown and repeated authorities stimulus checks, are spending robustly and their demand is driving a part of inflation. 

Along with pandemic stimulus checks, the pause on scholar mortgage funds gave quite a lot of people much more cash to spend.

I additionally admire the European Central Financial institution’s simple definition:

In a market financial system, costs for items and companies can at all times change. Some costs rise; some costs fall. Inflation happens if there’s a broad improve within the costs of products and companies, not simply of particular person gadgets; it means, you should purchase much less for €1 right this moment than you possibly can yesterday. In different phrases, inflation reduces the worth of the forex over time.

Okay, now that we perceive the fundamentals of what inflation is and what causes it, let’s talk about what we are able to do about it!

The place is Inflation Headed?

Winter view

Nobody is aware of. We don’t know if issues will return to regular (if that is “transitory inflation”) or if we’ll find yourself in an inflationary spiral the place it simply retains going up and up and up. Given these polar reverse potentialities, the whole lot I’ve written right this moment might be TERRIBLE recommendation or FANTASTIC recommendation.

Right here’s why:

  • If issues snap again to regular: it would have been very smart to delay purchases and I’ll appear to be a genius.
  • If inflation continues to extend on a runaway prepare trajectory: it could have been very smart to as an alternative purchase a bunch of stuff earlier than costs elevated and I’ll appear to be an fool.

Nobody is aware of what is going to occur, actually not me. However I’ll say this: it’s not going to harm to search for alternatives to save lots of more cash. Having cash saved up isn’t going to hinder you sooner or later. And if you happen to should make a significant buy proper now–reminiscent of a home or automobile–maybe you’re getting an incredible deal (if inflation continues to rise). Or maybe you’re means overpaying (if that is transitory inflation). However once more, nobody is aware of! So, finest to not panic.

Management What You Can Management

You, me and our mothers can’t management the financial system. We can’t single-handedly repair inflation and there’s no ‘one bizarre trick’ for surviving an inflationary interval. Given all that, don’t panic.

Late fall view

What we are able to do is be cognizant about which items and companies are growing in value and the way we’d create family budgets that nimbly reply to probably the most egregious value hikes.

Since inflation impacts each sector of the financial system, one technique is to delay purchases and keep away from shopping for non-necessities. That is at all times technique if you happen to’re making an attempt to be uber frugal, nevertheless it’s much more true if you wish to defend your self from inflationary shrapnel.

If you happen to haven’t taken my free, 31-day Uber Frugal Month Problem, now’s a good time to take action and to determine what you may cease or delay shopping for. Once more, this method is smart if you happen to assume this inflation received’t final eternally. It’s a horrible method if you happen to assume inflation will improve eternally and ever.

Are you able to cease or delay shopping for small issues like:

  • Clothes
  • Family decor and provides
  • Small home equipment
  • Giant home equipment too, come to think about it
  • Toys, video games, books
  • I ran out of examples, however you get the thought.

Are you able to delay shopping for huge issues like:

Mid-summer view

The concept right here is to briefly cut back your spending in discretionary areas. This helps not simply you but in addition the financial system as a result of inflation is principally too many {dollars} chasing too few items.

In fact generally you completely can’t keep away from shopping for–if you happen to’ve been pushing aside shopping for a automobile for years and it’s a must to purchase one now? You gotta do what you gotta do. If you happen to’re in the midst of a kitchen renovation and have to purchase a fridge? You gotta do what you gotta do. However you probably have flexibility, if you happen to don’t should have one thing immediately, delaying that buy could be smart.

Discretionary spending suits firmly into the class of controlling what we are able to management. Most of us don’t NEED a brand new purse or pair of footwear instantly. Most of us can delay a few of our purchases. We are able to wait and see what occurs whereas we allocate our cash in the direction of the issues we can’t delay shopping for, reminiscent of meals, childcare, drugs, and so on.

Re-Consider Pandemic Spending Habits

Many people modified our spending habits through the pandemic as a way to address quarantines, stay-at-home mandates, distant work/faculty, the upcoming apocalypse, and so on. And whereas the pandemic is on no account over, we’re in a distinct section. Most of us are again to some semblance of our before-times routine or we’ve settled into our new regular. In mild of that, take time to re-evaluate a number of the spending habits picked up throughout The Darkish Years.

Early spring view

Issues like:

  • Restaurant take-out and supply.
  • Grocery supply companies.
  • Transport charges to keep away from in-store buying.
  • Streaming companies: TV, music, films, gaming.
  • Month-to-month subscription companies: cheese of the month membership, wine of the month membership, ballpoint pen of the month membership, magazines, work-out apps, box-o-stuff subscriptions, meal prep containers.
  • Cool stuff for the home we have been caught inside: gymnasium gear, indoor bouncy homes, dwelling decor.
  • Deal with your self treats: dwelling manicure kits, dwelling cocktail-making kits, aromatherapy candles, customized dental floss, miniature knit sweaters for corgis.

If you happen to’ve gotten into the behavior of routinely ordering/paying for/subscribing to those companies, take a second to re-evaluate and think about if you happen to can scale these again as a way to make extra room in your price range for the stuff you may’t get rid of. Whether or not inflation snaps again or will increase, re-evaluating your spending is at all times a strong train (after all, I’d say that).

The Stuff You Can’t Eradicate

  1. Groceries
  2. Transportation
  3. Utilities
  4. Housing

Even earlier spring view

1) Groceries

Meals provides us probably the most flexibility for spending much less as a result of inflation’s not hitting all meals equally.

In accordance with the Shopper Value Index:

  • Beef elevated 16%
  • Meat, poultry, fish and eggs elevated by 13.7%
  • Vegatables and fruits rose 3.2% (in February, 1.5% in March)

I really like a burger as a lot as anybody, however I’m not shopping for beef proper now. You’ll be able to shelter your self from probably the most egregious blows by merely not shopping for the factor. We’ve transitioned to a extra closely vegetarian food regimen the previous few months to keep away from these greater meat, hen, fish and beef costs. If you happen to’re in a position to change your consuming habits for the short-term, that’s one of many best methods to ease your spending. Plus, doing this shook up our meal rotation and we’ve loved making some new recipes.

As at all times, the frugal maxims of cheap-n-healthy consuming apply:

  • Keep away from packaged, ready, and pre-made meals
  • Cut back your meat and dairy consumption
  • Purchase bulk, uncooked elements:
    • We just lately purchased 50lbs of natural complete wheat flour (for baking bread), 50lbs of natural oats (for making oatmeal) and 50lbs of dried chickpeas (for making hummus and roasted chickpeas) and the costs have been just like what they have been final yr.
  • Prepare dinner from scratch as a lot as your schedule and well being will permit:
    • Now’s a good time to go see if there’s a bread machine, stress cooker, Instapot, or crockpot on the market on the thrift retailer!
    • Now’s a good time to begin cooking with dried beans!
    • Now’s a good time to begin baking your individual bread and desserts!
    • Not everybody’s schedule or well being will permit them to do that, but when you are able to do one or all of this stuff, go for it!
  • Right here’s my full write-up in order for you extra concepts: Our Full Information To Frugal, Wholesome Consuming

Deep winter view

Facet observe: I do know some people have meals allergic reactions/particular health-related causes for consuming/not consuming sure meals and I’m not implying anybody ought to eat issues which can be harmful/inaccessible to them, so don’t come after me!

Restaurant eating is up 8%, which is but one more reason to give attention to meals-at-home. We’ve been consuming out much less the previous few months, which I desperately miss, however I additionally know that proper now I need to buckle down and spend much less.

2) Transportation

For many people, there’s not an entire lot we are able to do on this class, which is why I highlighted the potential adjustments to groceries. If you happen to can drive much less, do it. If you happen to can do business from home extra usually, do it. If you happen to can carpool or make the most of public transportation, do it. If you happen to should purchase a automobile, give attention to gasoline effectivity, however I completely would NOT advocate shopping for a automobile only for that purpose!

In truth, if you happen to can keep away from shopping for a automobile in any respect–used or new–that’d be perfect as a result of:

  • Used automobile costs are up an eye-watering 35.3%
  • New autos are up 12.5%

On condition that, don’t flip a $40 gasoline downside right into a $40k new automobile downside. Once more, I 100% get that generally, you may’t wait any longer to purchase a automobile. However if you happen to can wait–if shopping for a brand new automobile can be extra ‘good’ than ‘necessity’–wait it on out! Caveat but once more: perhaps costs proceed to extend and it’s best to truly exit and purchase ten vehicles right this moment. Who may know!?

3) Utilities

One other deep summer season

In case your state provides an vitality audit, sign-up for one right this moment! You would possibly have the ability to cut back your vitality prices OR there could also be state-funded packages providing rebates/tax credit for issues like putting in a extra environment friendly water heater, and so on. Additionally examine along with your electrical firm to see if they provide any packages or rebates you may apply for.

A straightforward DIY route is to purchase an vitality monitor, which you’ll plug into your home equipment to see what’s draining probably the most electrical energy (affiliate hyperlink).

4) Housing

Very similar to transportation, there’s not an entire lot most of us can do about the place we dwell. If you happen to can delay shopping for a brand new home, that’d be good, however generally you may’t. Typically you simply gotta purchase a home if you want a home. When you have steady housing, be actually grateful for it!

Keep in mind how I discussed awhile again that it could be a good suggestion to examine into refinancing your mortgage when rates of interest have been at historic lows? I hope you probably did so! For these of you with a hard and fast, low-interest price mortgage, be VERY grateful for that price. Having a hard and fast, low-interest price mortgage is usually a hedge towards inflation as a result of your mortgage is denominated in pre-inflation {dollars} whereas your wage is (hopefully) growing because of inflation. Durations of inflation are one purpose why I usually advise people (within the accumulation section) NOT to repay a hard and fast, low-interest price mortgage.

Make Inflation Work for You


Early spring

Along with making changes to your spending, study the way you would possibly have the ability to improve your revenue. We’re in a really fascinating employment atmosphere proper now and:

Unemployment is traditionally low at 3.6%

What this implies broadly: a lot of employers are hiring and there aren’t many candidates for these jobs.

What this implies for you: it’s most likely a superb time to:

  1. Ask for a increase out of your present employer.
  2. Search for a better paying job.
  3. Request extra flexibility out of your job as a way to offset different prices (for instance: extra work-from-home days to keep away from excessive gasoline costs and cook dinner dried beans in your thrift retailer stress cooker throughout your lunch break).

Curiosity Charges

Rates of interest are up proper now, which isn’t nice for issues like mortgage rates of interest, however IS nice for issues like high-interest financial savings accounts. Evaluate the rate of interest in your checking/financial savings accounts and think about switching banks if you happen to’re not incomes a strong share.

It’s additionally a good suggestion to make sure you have a legitimate bank card technique that’s reaping rewards you’ll truly use. Right here’s my current write-up on how to do that: How I Made $712.59 With My Money Again Credit score Card.

Flex Your Frugal Muscular tissues


A interval of inflation is a unbelievable time to bust out your frugal skillz. I discover that my frugality waxes and wanes over time, as evidenced by my month-to-month expense reviews. You’ll have observed I’ve tamped down our family spending for the reason that begin of 2022.

You, like me, have most likely honed your means to economize over time and now’s your likelihood to make the most of these capabilities. I don’t see this as a eternally factor. I see this as a ‘I’m going to mindfully spend a bit much less whereas inflation runs round like a frat boy with a purple solo cup of jungle juice.’


  1. Don’t panic. Nobody ever makes good monetary choices once they’re panicking.
  2. Perceive the distinction between your fastened prices and your discretionary bills.
  3. If you happen to’d like assist figuring out these, take my free Uber Frugal Month Problem.
  4. Search for methods to get rid of/delay/cut back your discretionary bills.
  5. Discover methods to scale back your fastened prices.
  6. Perceive which gadgets are hit hardest by inflation and strategize methods to keep away from shopping for these issues (i.e. beef and used vehicles).
  7. Don’t repay a hard and fast, low-interest price mortgage.
  8. Ask for a increase or discover a higher-paying job.
  9. Look at the rate of interest in your financial savings/checking accounts to be sure to’re incomes one thing.
  10. Have a bank card technique that provides you rewards you’ll truly use.
  11. Use this time to flex/develop your frugal muscle tissues.
  12. Know that nobody is aware of what is going to occur and issues may return to regular or inflation may proceed to rise.

What questions or recommendation do you’ve gotten about surviving inflation?

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