Inflation is a significant challenge for almost all of us. After three years of inflation in excess of 6% annually, we are feeling the impact on our personal finances. Recent statistics are showing evidence that many families are relying on credit card and other forms of debt to finance the rising costs of daily life. Credit card debt balances are at record levels and savings levels are at historical lows.
Here are 9 ways to win the inflation battle:
2. Budget. Planning where we want our money to go is the most effective way to offset rising costs, yet more than 60% of us don’t use a plan. Find a budget method that works for you and leverage it to help you. Statistics show that using a budget can reduce expenses by up to 15%! I like using my bank spending tracking App to track my weekly spending, and then load that information to an Excel budget template to track monthly and annual progress.
3. Review discretionary spending We need to take a hard look at all recurring memberships and subscriptions to confirm if we are really getting good value from them. For example, do we really need that gym membership? How about 3 different movie subscriptions?
4. Get new quotes on all insurance coverage. Insurance for our home, vehicles, and other possessions is a significant expense for all of us — and has been increasing dramatically. Ask your broker to obtain multiple quotes for you.
5. Delay replacing your vehicle. Supply chain challenges have caused used and new vehicle prices to jump by more than 25% in many areas. If at all possible, make your vehicle last until the market stabilizes and prices come back down to where they should be.
6. Review all utility, cable, and mobile plans. Don’t hesitate to call your provider and let them know you need to reduce costs, and ask for their ideas. Many of them have lower cost plans that they only tell you about when they know there is a risk of you going elsewhere.
7. Aggressively pay off consumer debt. Debt becomes even more of a burden when inflation is making our budget tighter and interest rates are increasing. Make paying off your credit card and other consumer debt a priority to take pressure off your monthly budget. If necessary, consider selling assets you can live without or downsizing to a less expensive vehicle to allow you to pay off your consumer debt more quickly.
8. Maintain an Emergency Fund of at least 3 months of expenses. Surprises happen, and an emergency fund allows us to avoid going into debt when they do. If you are still paying off consumer debt, then start with a $1,000 Emergency Fund and build it up to 3 months of expenses once consumer debt is paid off.
9. Maximize your income. We need to ensure we are working diligently to be excellent at what we do. This not only provides for us, and maximizes our earning power, it also gives us a strong testimony.
Winning the battle against inflation is not easy, but if we do our part to be good stewards and ask God to do His part in providing, we will win!
You can access this entire magazine for free here: Edition 40
