Between a four-decade record high for inflation and rising interest rates, many Americans are being squeezed financially. This is especially true for people with low and moderate incomes, as price hikes consume a higher percentage of their pay versus higher-income counterparts. Below are dozens of tips for Extension educators to share with clients to help them “claw back” the purchasing power that high inflation and rising interest rates are taking away:
- Shrink Food Spending – Specific strategies include sticking to a shopping list, buying less food by cutting out “extras,” using newspaper and/or online coupons and double coupons, buying store brands, joining supermarket reward/loyalty programs, cutting and chopping food at home (e.g., fruit, meat, salads), buying and freezing fresh fruit in season, shopping at a warehouse store, and buying still-good markdown items.
- Change Eating Habits – Examples include using leftovers promptly to avoid food waste, serving smaller food portions, eating more meatless meals by replacing meat with other protein foods, reducing unhealthy snack foods, and reduced consumption of soft drinks and alcohol.
- Accelerate Debt Repayment – In a rising interest rate environment, it pays to reduce outstanding balances on loans and credit cards by making extra payments. Reduced spending can free up money to do this. Two ways to pay off debt faster are the snowball (put extra payments on smallest debts) and avalanche (put extra payments on highest interest rate debts) methods. The PowerPay program can be used to create a plan for either method.
- Inquire About Discounts – Even in an inflationary environment, prices may be negotiable if people simply ask or agree to go through “hoops” (e.g., automatic bill-pay). It never hurts to ask questions of utility companies, insurance agents, and other vendors. Avoid “yes/no” questions like “Can you lower this price?” and, instead, use phrases like “Tell me about available discounts and other ways that I can save money.”
- Drive Smarter – Consolidate family errands to drive less and use apps to find the cheapest gas. Driving the speed limit also saves on gas. Driving from 60 mph to 70 mph decreases fuel economy by 14% and, from 70 mph to 80 mph, another 15.4% according to the U.S. Department of Energy. Other money-saving tips are paying for gas with cash at gas stations with discounts and joining a retailer’s gas rewards program.
For dozens of additional inflation-fighting ideas, review this article from Rutgers Cooperative Extension.
For additional content related to working with clients on personal financial issues, visit the OneOp Personal Finance Team. Free CEUs are available for AFCs and CPFCs through our webinars.
Written By:
Barbara O'Neill
Edited By:
Selena Garrison
Program Coordinator
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