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Budgeting to Beat Inflation

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Inflation, as the word implies, occurs when the costs of goods and services rise nearly simultaneously across the economic spectrum. Harboring both short- and long-term effects, the lingering consequences of inflation can make life difficult for families — both now and in the future. Of course, most people are just more concerned about the here and now. With that in mind, let’s take a look at some tips for budgeting to beat inflation.

Develop a Spending Plan

It’s critical to have a spending plan in place to cover the costs of things upon which inflation is most likely to impose hardship. This will help you adjust your life to avoid overspending, especially in the areas of fuel, clothing, and food.

Decide how much you can afford to spend at the beginning of the month, making sure all of your key needs are met. And, whatever you do, avoid going into your savings and retirement funds to help make ends meet. Avoid using credit cards and running up debt as well.

Having a plan will ensure you assign your dollars to the most urgent needs and forgo things you can comfortably skip. For example, do you really need to spend $5 a day for that gourmet cup of coffee on your way to work each morning? Extended out over the course of a month, that “$5” cup is actually costing you $200 monthly.

Meanwhile, you can make a perfectly good cup of Joe at home. Get yourself a thermos cup and sip hot coffee during your commute until your heart is content.

Pay Off Debts

There are many strategies you can employ to rid yourself of debt to ensure more of your disposable cash goes toward helping you through an inflationary period. The folks at Freedom Debt Relief have information on a number of California debt relief options you can pursue, as well as choices for people in nearly every other state.

Paying off debts during an inflationary period can work in your favor because you’re using dollars that are worth less to pay off debts incurred when cash had a higher value. That’s almost like getting free money with which to help defray your cost of living.

Play the Second-Hand Game

A carefully selected used car will get you back and forth to work the same way a brand new one will, for far less money.  Shopping in discount grocery stores, instead of the big chains, will get you more food for less money because you aren’t paying for a fancy ad campaign and flashy store décor.

Similarly, off-price retailers such as Ross, Marshall’s and TJ Maxx, et al have excellent prices on good quality items. If you must shop in a big department store, walk right past the racks closest to the doors to the back of the department where they keep the clearance items.

Craigslist is an excellent resource for gently used furniture, home electronics, and a host of other items for which someone else has already paid full price. Nobody will know where you got them — unless you tell people.

In other words, there is no shame in the second-hand game.

Cut Expenses and Cords Too

Did you know you can buy your own internet modem and router? There’s no need to pay your provider to rent that equipment. Buy your own and that gear will pay for itself because you’re no longer paying rental fees.

If you’re still paying a cable provider to get TV programming, look into a more affordable streaming option instead. You’ll pay less to see exactly what you want, instead of paying more to get a lot of things you don’t want to see.

Seek Free Entertainment

Get a public library card and borrow DVDs from the collections your tax dollars have already paid to curate. Read books for entertainment instead of paying $22 to see a film in a theater. Rather than going out to dinner with friends, take turns preparing meals for one another in your homes. Go to museums on the free days they offer each month. Look for free concerts to attend in the park and pack your own snacks to take along.

These are but a few of the many ways you can go about budgeting to beat inflation. One last thing, don’t let a rising cost of living make you lose sight of your financial goals. The point of cutting back in all of those other places is to ensure you still have the cash to save and invest for your retirement.

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