How To Save Money During Inflation: 15 Tips

Everyone is feeling the pressure of inflation from the cost of eggs to the cost of used cars. The consumer price index from the U.S. Bureau of Labor Statistics shows the increase in prices of common food items and energy. Major food categories are up 6.7% in the last 12-month period ending May. With increased costs, saving for big financial goals can be more challenging. While inflation may remain high for some time, the tips below can help you reach savings goals and increase financial security — even during this inflationary period. Read on to learn how to save money during inflation.

15 Tips to Save Money During Inflation

Small habits can build up over time. From creating a budget to clearing high-interest debt, the tips below will help you save more and reach financial goals big and small. Apply the habits below to create your own strategy for how to beat inflation.

1. Create a Budget

Develop a detailed budget to track your income and expenses. This will help you identify areas where you can reduce spending and save more. The first step to budgeting is to track everything you spend. This can be eye-opening and can help you identify areas where you might be able to cut back. 

Consider also using budgeting apps or tracking with a spreadsheet. Once you know how much you’re spending, set a realistic budget that can help you meet savings goals and covers basic expenses. 

2. Reduce Discretionary Spending

Limiting spending on nonessential items such as dining out, entertainment and luxury purchases is the first step to save more. Consider a no-spend challenge or allocate a set budget for discretionary spending and stick to it. 

One way to do this is the 70-20-10 budget, where you allocate 70% of your income to essentials, 20% to savings and 10% to discretionary spending. You can also reinvest that 10% discretionary into savings to build savings faster. 

3. Shop Smart

How can you save money on groceries during inflation? Look for sales, discounts, and use coupons when shopping for groceries and other necessities. A number of coupon apps, as well as store-specific apps or memberships, can help you save more. 

You can also stock up on nonperishable items when they’re on sale. And try “shopping” your pantry by making it a goal to use up all the extra canned, frozen, and dry foods you're storing. 

Likewise, look at which types of foods or meals are the most costly in your budget, and consider making them a treat rather than an everyday staple. Then add more dry beans and grains, which are cheap, nourishing and readily available. They can be the foundation of a low-cost diet, with meat, cheese nuts, and other high-cost items serving as condiments. 

4. Buy Generic Brands

Generic or store-brand products are often the same quality as name brands but at a fraction of the cost. Instead of name brands, consider choosing generic brands to save money on everyday items.

5. Bulk Purchases

Buy items in bulk for better deals and discounts, especially for nonperishable goods. Costco Wholesale, Sam’s Club or other big-bulk stores are good for this but only if you prepare. You don’t need a six-pack of salad greens if you only eat a salad once a week. Likewise, you might not need the jumbo bag of chips calling your name. However, you can save significantly on staples your family consumes regularly, from cheese and olive oil to cereal, fruit and frozen foods. 

In addition, many grocery stores offer bulk bins that sell everything from dried beans and grains to cereal, granola, snack mixes and nuts at a discount. Use the containers provided or bring your own to stock up on basics for less. 

6. Comparison Shop

Compare prices before making significant purchases to find the best deals. This goes for big-ticket items like TVs, lawnmowers, computers, refrigerators and services or smaller purchases. Get into the habit of checking prices and doing an online search to see whether there are better options available. 

Also, consider whether it’s a purchase you could put off for six months, until the next sale, or whether you need it immediately. 

7. Cut Utility Costs

Reduce energy consumption by turning off lights and appliances when not in use and consider energy-efficient upgrades. Unplug unused appliances to avoid energy “leaks.” And turn off the tap, reduce shower time and run the dishwasher or washing machine less to save on water. You can also cut utility costs by reducing heating or air conditioning use. Consider a solar installation or community solar program to reduce energy costs. 

8. Refinance Debt

If you have loans or credit card debt, explore options for refinancing at lower interest rates to save on interest costs. This can include consolidating debt onto a 12-month 0% annual percentage rate (APR) credit card or taking a low-interest personal loan or debt consolidation loan. Of course, if you can pay off debt, that will have the greatest impact on reducing interest rates. 

9. Avoid Impulse Buying

One of the best ways to save money during inflation is to avoid impulse purchases, which can eat into your hard-earned cash. Before making a purchase, take some time to consider whether it’s a necessary expense or an impulsive buy. You can set a one or two-week waiting limit on any “wants.” If you still remember them when the time has passed, and they seem necessary, make the purchase. 

Some psychologists also recommend putting “wants” into your mental shopping basket so you get the satisfaction of the purchase without spending money. Or take the amount of money you would have spent on the impulse purchase and transfer it directly into savings so you get the satisfaction of watching your savings grow.

10. Increase Savings

How can you save money during high inflation? Make a conscious effort to increase your savings, even if it’s a small amount each month. Consider automatic transfers with each paycheck, $1 to $10 per day or any other goal that is achievable for your family. Every bit counts during inflation.

11. Pay Off High-Interest Debt

High-interest rates on debt can eat into savings and trap you in a cycle of debt. Never only pay minimums on credit card debt if you can pay more. If you only pay minimums, you’ll pay several times the original items’ value in interest. Instead, prioritize paying off high-interest debts, as they can cost you the most in the long run.

12. Use Rewards Programs

Take advantage of credit card rewards, loyalty programs and cashback offers to get some value back on your purchases. At a minimum, look for a credit card with 2% cash back. Some cashback credit cards offer up to 5% back on gas and groceries, increasing savings. To multiply the effect of the savings, automatically transfer any cashback you earn into a savings account. 

Alternatively, consider a travel rewards credit card or other rewards card where you can earn points for travel, concerts or other special activities that can make sticking to a budget easier in the long run. Most credit cards offer a signup bonus, which can give you an extra boost shortly after opening the card. 

13. Limit Credit Card Usage

Use credit cards responsibly and avoid carrying balances to prevent accumulating high-interest debt. Think of a credit card like a debit card and only spend what you can pay off each month. If that’s difficult, consider switching to cash or a debit card to keep spending in check. 

14. Negotiate Bills

Contact service providers and negotiate lower rates on cable, internet and insurance services. You can also cancel extra streaming entertainment subscriptions or other online subscriptions or apps you’re not using to save between $10 and $50 per month. 

15. Embrace Thrifty Habits

Adopt thrifty habits such as cooking at home, carpooling or using public transportation to save on commuting costs. Consider potlucks or picnics with friends rather than restaurant meals. Find free entertainment options, from days at the park to free museum days, free outdoor performances or search for discounts on special activities to save more. 

Conclusion

Dealing with inflation will look different for each family. Only you know which items are essential and which you could live without. Take the time to consider big purchases, shop around and build fun family traditions around free or low-cost activities. Remember that every little bit counts. 
Making it fun is one of the best ways to save money during inflation. Take it one day at a time, and incorporate more creative savings ideas. When you prioritize savings, you’ll gradually find more everyday ways to save.

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