Americans looking for relief from inflation got some bad news from Federal Reserve Chair Jerome Powell this week.
Speaking at a Federal Reserve conference in Jackson Hole, Wyoming, Powell told attendees the fight to reduce record inflation (which stands at a 40-year high) requires a steady diet of higher interest rates, which Powell believes will eventually tamp inflation down.
That process could take a while, Powell noted.
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance,” Powell said in a speech on Friday. “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”
“These are the unfortunate costs of reducing inflation,” he said.
Seven Creative Ways to Battle Inflation
In one regard, many Americans seem to be well ahead of Powell on the “pain management” portion of inflation. Sacrifices are being made in millions of U.S. households, as consumers look for effective ways to deal with the rising prices of goods and services.
“Americans are continually looking for ways to cut costs amid high inflation, particularly as we approach back to school season and holiday shopping season,” said Lisa Fischer, the chief lending officer at Mission Lane, a financial technology firm. “While there is no immediate relief to economic volatility, there are plenty of ways individuals can prepare for continued economic uncertainty.”
What inflation-fighting strategies should be deployed by Americans with their household budgets? These seven tips top the list,
Record Your Spending.
Fischer says her best saving and budgeting advice is to write everything down.
“There is a power in writing things down and holding yourself accountable for how you spend and save your money on a regular basis,” she said. “Tracking your finances consistently to stay organized is essential to your financial wellbeing regardless of where you’re at in life. It is not limited to paying off debt or responding to a crisis.”
Scrolling through Twitter, Facebook, and Tik Tok, among other social media platforms, can be a “huge contributor” to overspending,” Fisher noted.
“My advice for someone who can’t help but spend more after scrolling through social media due to targeted ads is to put down the phone or turn off the computer,” she said. “Step away from what triggers your impulse buying and instead occupy your free time with something that brings you joy and takes your mind off of what other people are doing online.”
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Schedule a Home Energy Audit
According to Energy.gov, people can save up to 5% to 30% on their home energy bill through a home energy audit.
“In some cases, a local government or utility company may even offer a subsidy to offset the audit cost, which tends to run anywhere from $300 to $500,” said Colleen McCreary, consumer financial advocate at Credit Karma.
Cancel Unnecessary Subscriptions
Subscriptions are everywhere nowadays, and these small monthly fees can add up fast. In addition to publications, many people subscribe to multiple video streaming services, music services, even to a monthly taco pass from Taco Bell.
“Scan through your bank account or credit card statement to find any monthly bills that could be eliminated (even temporarily) from your budget to help rein in your spending,” McCreary advised.
Keep Your Car in Good Shape
A well-maintained vehicle consumes less fuel – and that can save big money.
“Make regular checks and do everything to keep your car in top-notch condition,” said Chris Nddie, Co-Founder & CEO at ClothingRIC, a frugal lifestyle platform. “Check the owner’s manual and make sure the tires have the appropriate air pressure level. In some cases, tires that are not properly inflated reduce the car’s fuel efficiency by 5%.
Dirty air filters are another culprit when it comes to increasing your fuel expenses. “They make the engine work harder and consume more fuel than usual,” Nddie added. “You need to change your air filters regularly as per the manufacturer’s recommendations. As a bonus, doing all this should also get you a better price if you ever decide to sell your vehicle.”
Staycation Instead of Vacation
Most Americans were locked in their homes for a major part of two years during the pandemic and, if nothing else, learned to enjoy activities in backyards and apartments during this time.
“It’s time to put all that experience to good use by enjoying a staycation instead of a vacation,” Nddie said. “Traveling is extremely expensive right now due to the rise in fuel prices. You can either enjoy some time at home or look for spots near your home to relax. Flying out to another country isn’t the best thing to do in the current economy.”
Visit Your Nearest Dollar Stores
Dollar stores can be life savers for anyone who operates on a limited budget.
“Whether you’re buying towels, kitchen utensils, decorations, or any other everyday use items, dollar stores have this stuff at a much cheaper rate than other retail outlets,” Nddie noted. “Admittedly, you have to be extremely smart while shopping from such stores because the products from here can often be subpar.”
“But if you put in some research, dollar stores are a good money-saving option during the current inflation,” he added.
Source: https://www.thestreet.com/personal-finance/seven-cost-saving-ways-americans-can-beat-inflation-in-2022?puc=yahoo&cm_ven=YAHOO&yptr=yahoo