From gas prices to groceries, inflation was undoubtedly one of the biggest issues for Americans in 2022.
The U.S. saw its highest inflation in nearly 40 years as the price of consumer goods jumped 7.1% over the past 12 months. While inflation has started to moderate in recent months, consumers will still be feeling the sting of the 2022 surge well into 2023. Here's five tips to help combat the impact of inflation in the New Year.
Plan Your Trips to the Grocery Store
One of the hardest-hit industries by inflation is groceries. While overall inflation was up 7.1% in November, the price of groceries was up 12% year over year. This is why it's crucial to shop for your food strategically. Before you go shopping, plan out your meals for the week and make a list of what you are going to need — and stick to the list. This will help you avoid impulse buying. Another way to save money at the grocery store is by swapping out name brand products for the store brand. Across the various food categories, buying store brand over name brand averages out to around 40% in total savings.
Compare Insurance Bills
If you haven't taken a good look at your insurance costs recently, this is a good time to do so. The way to see the biggest change in your insurance bills is to shop around. Drivers with a good driving record and credit score can save more than $150/month on average by switching from the most to least expensive insurer in their state. That number jumps to between $250 and $400 for drivers with a recent at-fault accident or poor credit. Make sure you get quotes from a number of different competitors. You can also save money on your insurance costs with your current provider by raising your deductible, negotiating a safe driving discount, or by reducing coverage if it makes sense for your situation.
Analyze Subscriptions
The average American spends $219/month on subscriptions. This includes streaming services, fitness memberships, meal prep kits, and more. That means the average American is spending $2,628/year on these subscriptions. Take stock of all of your monthly subscriptions or any services or products you have automatic payments set up for. If it's something you haven't used in the last month, it's time to get rid of it. Doing an audit of your subscriptions is an easy way to cut out unnecessary spending.
Maximize Credit Card Rewards
A great way to maximize your spending is by purchasing with the right credit card. There are tons of different credit cards out there with varying rewards, from cash-back rewards for purchases at grocery stores to travel points. Find a card with rewards that benefit your shopping habits, as there are certainly cards out there that make sense for everyone. Below, we've outlined a few options for our members to consider exploring further for their personal finance savings goals:
- For Gen-Z: The Discover It Card is a nice choice for those looking at potentially opening their first credit card. This card offers 5% cash back from different options that alternate each quarter, such as grocery stores, restaurants, gas stations, and Amazon. There is also unlimited 1% cash back on all other purchases.
- For Millennials: The Capital One Savor Reward Card is helpful for those looking for some help with everyday purchases. This card offers unlimited 4% cash back on dining, entertainment, and streaming service purchases, plus 3% back at grocery stores. You receive 1% cash back on all other purchases.
- For Gen X: The Chase Freedom Unlimited Card rewards those on the move. This card offers 5% cash back on travel purchased through Chase Ultimate rewards, 3% cash back on dining out/takeout, 3% cash back at drugstores, and 1.5% cash back on all other purchases. In your first year with the card, they bump all of those cash back percentages up by 1.5%.
Pro Tip: For this tip to work, you need to be paying your credit card bills in full and on time every month. Do not spend more than you have. Once you start missing payments and have to pay interest, you'll be offsetting any of the rewards you'll be earning.
Ask for a Raise
If your performance at work has been exceeding expectations and you haven't recently received a raise, take the opportunity to request a meeting with your manager. During your conversation, if you believe that you are deserving of a raise, ask about cost-of-living pay increases after highlighting your accomplishments. If your company doesn't have the budget to give you a raise, there were about 1.7 job openings for each job seeker as of October. With there being a significantly higher number of job openings than people looking to fill these positions, employees seeking higher wages could have additional leverage.
While we may not see inflation regulate until the end of 2023 or early 2024, with the right planning and these tips, members can help reduce the impact inflation has on their wallets.