It’s normal for the cost of living to creep up a little bit each year, but when prices start to surge more dramatically, that’s a telltale sign of inflation—and in 2022, inflation is costing the average U.S. household nearly $300 extra each month. You might be feeling the pinch at the gas pump, the grocery store or even your favorite online retailers.
Although the forces behind inflation can be complicated, there are some simple ways you can minimize the effect of inflation on your budget. Here are a few tips to help you weather rising prices.
1. Cancel unused subscriptions.
It’s easy to find yourself paying for countless subscription streaming or delivery services, but how many do you use on a regular basis? Cleaning up your subscriptions is a quick way to free up extra wiggle room in your monthly budget and find savings as prices rise elsewhere.
2. Consider inflation-linked investments
Treasury Inflation-Protected Securities—or TIPS for short—can be a worthwhile investment for some people, especially during times of inflation.
The value of these securities goes up as inflation rises and decreases with deflation. The terms on TIPS range from 5 to 30 years, and the minimum purchase is only $100, making this an accessible form of investment.
I bonds are another type of investment with interest rates linked to the rate of inflation, which makes them attractive to investors looking for ways to hedge against inflation.
3. Shop smarter online and in-store.
As food prices rise, you can save money by taking the time to comparison shop and track down coupons (either paper or digital) before you head to the store for groceries and everyday necessities.
Larger purchases are also becoming more expensive: The cost of major appliances and other electronics has jumped in the past year, so it pays to bargain hunt before you buy.
For online purchases, you can subscribe to emails from your favorite retailers to stay up-to-date on sales and promotions; consider using shopping apps that help you find the best deal before you order online.
4. Get strategic with investments.
Now might be a good time to hedge against inflation by investing strategically in areas like real estate or commodities. Just remember that no investment offers guaranteed gains—there’s always a risk of loss.