Inflation can be a real burden on our finances, causing prices to rise and making it harder to make ends meet. However, there are steps you can take to stretch your paycheck and fight the impact of inflation. We interviewed some of the top money experts to gather their advice on how to combat inflation and make your money go further. Here are their top tips:
1. Maximize Your Savings: Despite the downsides of inflation, there is one positive aspect—interest rates on savings are currently high. Barbara Ginty, a Certified Financial Planner and host of the Future Rich podcast, recommends keeping your emergency fund in a high-yield savings account to benefit from these rates. Similarly, David Bach, author of The Automatic Millionaire, suggests putting your funds into a money market account, which can provide substantial returns.
2. Budget Your Income: If you haven’t already, now is the time to start budgeting. According to Rachel Cruze, author of Know Yourself, Know Your Money, creating a zero-based budget can help you take control of your finances. This means allocating every dollar of your income towards your expenses, including savings and giving, until you reach a balance of zero. By prioritizing your spending and focusing on essential expenses first, you can identify areas where you can find extra savings.
3. Cook at Home: Dining out and ordering takeout can quickly eat into your budget, especially when prices are rising. Julien and Kiersten Saunders, founders of the Rich & Regular blog, suggest cooking more meals at home. Learning how to cook well and making the most of ingredients can significantly reduce your food expenses and minimize waste.
4. Avoid Unnecessary Purchases: Impulse buying and stocking up on items you don’t need can contribute to financial strain. Marcus Lemonis, former host of The Profit and Streets of Dreams, advises against buying more than you truly need. By focusing on essential purchases and being conservative in your consumption, you can prevent unnecessary expenses from depleting your paycheck.
5. Invest Wisely: If you have some room in your budget, consider investing your money. Tiffany The Budgetnista Aliche, author of Get Good With Money, suggests that investing can help you outpace the impacts of inflation. By making your money work for you and earning returns that exceed the inflation rate, you can protect your wealth.
6. Increase Your Income: Increasing your income is another effective way to combat inflation. Bola Sokunbi, founder and CEO of Clever Girl Finance, advises looking for creative ways to earn more money. This could involve taking on a part-time job, finding a higher-paying position, selling items you no longer need, or starting a side hustle. By actively seeking opportunities to boost your income, you can counter the effects of rising prices.
Remember, while inflation may be inevitable, you have the power to make your paycheck stretch further. By following these expert tips and taking control of your finances, you can navigate inflationary times with confidence and maintain financial stability.
