Inflation has hit levels not seen in 40 years, and Americans' wallets are feeling the strain.
Prices are rising on everything from energy to food to shelter, costing the average American household an additional $327 per month, according to a Moody's Analytics analysis. That's higher than last month's estimate of $296 per month.
The latest figure is based on the Consumer Price Index's 8.5% year-over-year rise in March. The index measures a basket of goods and services.
Food rose 1% from last month and 8.8% over the last 12 months, while gasoline jumped 18.3% since February and 48% from last year.
However, there is some good news, according to Moody's Analytics' senior director of research, Ryan Sweet, who conducted the analysis.
"Our forecast is that March was the peak for year-over-year growth in inflation and that it will gradually moderate," he wrote.
Yet it's expected to take some time for inflation to cool off. With that in mind, here are things you can do now to try to mitigate that $327 monthly dent in your budget.
Since prices are increasing so frequently, it's a good idea to review and reassess your budget on a weekly basis, said money expert Sahirenys Pierce, founder of personal finance blog Poised Finance & Lifestyle.
"You want to be aware of where all of your money is going and give yourself the opportunity to lower another area of your budget to make the numbers work," she said.
One way to lower your costs is to cut out things you don't need, such as subscription services. You can also try negotiating to lower bills like your cable bill or car insurance, suggests Misty Lynch, a certified financial planner with Walpole, Massachusetts-based Sound View Financial Advisors.
Save on energy by unplugging appliances when they are not in use or using power strips with switches that allow you to completely turn off the products plugged into it. By doing so you could save 5% to 10% of your residential energy use, according to the Department of Energy. Turning down the heat can also help save money.
To save on gas, be strategic about the use of your car. If you have to run errands, do them in one trip and at a time when there is not a lot of traffic, Lynch suggests.
When grocery shopping, be armed with a meal plan for the week that's already in place.
"It does help people save money if they know what they are going to eat and stick with it," Lynch said.
Pierce likes apps such as Flipp to look up grocery store ads. She creates a meal plan for the week that incorporates items that are on sale and prepares three of those meals on Sunday. Having a plan in place for the remaining days of the week helps her avoid picking up takeout or fast food.
"This strategy has helped my family save hundreds of dollars during our debt-free journey, the pandemic and now during times of high inflation," Pierce said.
If you don't need a specific brand item, you may save money at a discount grocery store. Buying items in bulk in a warehouse store, like Costco or BJ's, may help you avoid future price hikes.
To comparison-shop, look at a product's unit price, which is essentially the cost per unit of a particular product. For instance, canned goods may be priced per ounce and paper goods may be priced by sheet or feet. So while a product may seem cheaper at first, it may not be the best deal because it has fewer units than a higher-priced item.
Use coupons in-store and online. You may get them as part of a retailer's reward program or credit card. Meanwhile, browser extensions such as Rakuten and Honey automatically search for coupon codes and apply them at checkout when you shop online.
It might be tempting to ride out the storm by accumulating credit card debt. Don't do it, said Dawit Kebede, senior economist at the Credit Union National Association.
Credit card interest rates are already high, clocking in at an average of 16.26%, according to CreditCards.com. They are expected to rise as the Federal Reserve continues to hike interest rates this year to help contain inflation.
The worst thing that people saving for retirement can do is stop putting money aside to help pay for increased costs now, Lynch said.
"Twenty years from now, things are going to be twice as expensive," she said. "Don't stop investing."
"It is one of the only ways that has been proven to fight inflation."
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