15 Expert Tips for Beating Inflation

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Inflation has peaked at its highest point in nearly 40 years, spelling bad news for consumer wallets. Here are a dozen plus ways to fight back against your reduced spending power.

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Your boss just called and gave you the bad news.

No, you haven’t been let go, but you did just get a near 10% pay cut – effective immediately. Not a great start to your Wednesday morning. But that’s exactly what happened to all of us since July of last year whether or not we actually got the audio memo or not.

With the Consumer Price Index (CPI) hovering at 8.5% year over year, Americans are noticeably feeling pain when it comes to paying for everyday items. The price of gas, groceries, you name it, it’s virtually all impacted by the effects of inflation.

To put it all into perspective, someone who earned and spent $50,000 last year now needs to make $54,262.41 to maintain their standard of living. If you didn’t get that year end raise we all hoped for last year, odds are you’re feeling a little pinched, especially if things were already tight to begin with.

To that end, we’ve put together a list of fifteen different ways you can take back your purchasing power, and kick inflation to the curb.

1. Move cash to a high-yield savings account

Having lots of cash sitting idle in low-rate accounts is the most ineffective way to combat inflation.

What cash you must keep on hand, such as an emergency fund or cash to cover everyday expenses, put in an online savings account to recoup as much spending power as possible.

You’re still losing to inflation, but the goal here is to claw back as much earning power as we can.

2. Get a cash-back card

If you’re not on the market for a new car or home, consider opening a new line of credit.

Responsible card owners can take advantage of generous new card offers, many of which have robust cash-back rates on gas, groceries and travel.

With market averages sitting between 1% and 5% rewards on just about every category imaginable, it’s an easy way to earn passive income in perpetuity that helps offset protracted inflation.

3. Take advantage bank bonuses

High interest rates aren’t the only way consumers can cash in on banks’ desires to acquire new customers.

Odds are there are several hundred very free dollars waiting for you at one of many traditional banking institutions.

For example, Discover Bank, Member FDIC, is currently offering up to $200 in bonuses (CODE: GOBP622) for opening a new account (new customers only). A tiered bonus, you’ll earn $150 for deposits between $15,000 and $24,999, and $200 if you deposit $25,000 or more.

Not everyone has that kind of cash on hand, but if you do, and it’s earning .06% at your traditional brick and mortar, this is an easy way to earn a few hundred bucks, and take advantage of their industry leading 1.70% APY ($0 minimum balance).

4. Use cash-back apps

The only thing that beats a double-dip ice cream cone on a hot summer day is paying for with triple-dipped cash.

Smartphone cash-back apps allow you to do just that. By leveraging a cash-back credit card linked to one of many popular cash-back apps (which is then paid off using cash in a high-yield savings account), users can reasonably expect cumulative savings in the neighborhood of 5 to 10%.

If you’re buying groceries for a family of four, or seemingly always at the pump, we’re talking hundreds of dollars saved each and every month. Coupons present as the elusive fourth scoop of this proverbial savings cone, so be sure to keep an eye out for those too!

5. Plan out purchases

The only thing that loses to inflation more than keeping savings in low-yield cash accounts is spending money on frivolous things you never needed to begin with.

Planning out purchases before going to a store helps you stay on track, and something as simple as sticking a written list can help keep you accountable for only buying what you need.

Keeping a budget and tracking your spending are two other proven tactics for keeping the temptation to window show at bay.

6. Cook at home

Food costs have skyrocketed over the last year, and those costs are being passed onto the consumer (and then some extra) by restaurants. Perhaps easier said than done, cooking at home can be a real game-changer when it comes to saving money on food.

One of the best ways to get started with home cooking is to plan out your meals in advance, a few days at a time. If the thought of this sends shivers down your spine, remember that you can have “repeat” meals that you prep in bulk beforehand; you don’t need to cook a unique meal from scratch three times a day.

Related: 14 Smart Ways to Save Money on Groceries

7. Buy in bulk

If money is tight, the last thing you probably want to do is buy in bulk, but in many cases it really is worth it – especially when it comes to food. For instance, buying a 2-pack of chicken breast may cost $3 a pound, but if you buy the bulk pack that comes with 6 breasts, you likely be able to get them for $2 or less per pound. That might not sound like much, but saving over 30% on food that you know you are going to eat will greatly help reduce your monthly food budget.

The trick to buying in bulk, if you are new to it, is to go from buying a 2 or 3-day supply of something and instead buy a 1-2 week supply. You’ll realize the benefits sooner and it will feel more rewarding than buying a 96 pack of toilet paper.

8. Minimize food delivery

Food delivery blew up during the pandemic, and for many of us, the convenience factor made it hard to give up once the world started to return back to normal. If you have a habit of DoorDash (or whatever delivery service you use), cutting back here is an easy way make room for other, more necessary, items in your budget.

9. Go generic

Brand loyalty in the personal finance space is akin death by a thousand papercuts.

A recent study by Accenture showed that consumers spend on average 18% more for products from brands to which they’re loyal when compared to identical products made by other manufacturers.[1]

A good way to make the effects of 8.5% inflation all the more painful is to pay nearly 20% more for them.

But really, even those numbers don’t paint the whole picture.

Take generic medications, for example. A recent FDA-published study showed that generic medications – when six or more companies were in competition – cost up to 95% less than their branded competitors.[2]

Your Excedrin Migraine and Kroger Migraine really are the exact same thing, but you’ll pay nearly 700% less for the latter.

10. Diversify your portfolio

Talk of recession and high inflation have many worried about the state of their portfolio. But moving money to cash or getting out of the markets entirely can do substantially more harm than good.

Instead, experts suggest using periods of fear to ensure that your money is still invested in a safe array of investment vehicles. Being cash heavy will maximize losses to inflation, and being overly equity heavy can inflict even more pain.

Speak with a trusted financial advisor and ask them to show you how your portfolio is invested to protect against periods of protracted inflation.

11. Negotiate bills or cut less-used subscriptions

Regardless of inflation, it’s a good idea to get into the habit of doing this once or twice a year. We’ve all had that free trial that we forgot to cancel or the subscription we’ve been overpaying for for too long (like cable TV).

Also, if you and your spouse both have your own Amazon Prime subscription, make sure you consolidate down to just one. My wife and I basically paid double for Amazon Prime for over a year because we didn’t consolidate.

For more automated help with cutting your subscription costs, check out these bill negotiation apps.

12. Rewards apps for gas and groceries

While broad-use cash-back apps are great for saving money on everyday purchases, one many be able to save even more by using category specific apps.

Gas cash-back apps such as GasBuddy or Upside offer savings as high as 25 cents per gallon of gas.

Similarly, grocery apps such as Ibotta allow active users to save as much as $300 per month, according to a company spokesperson.

13. Tackle rate-variable debt

When the Federal Reserve attempts to combat inflation by raising interest rates, this means that many credit products will have increased interest rates. For instance, if you have credit card debt that was previously accruing 20% interest per year, odds are that the interest rate on that same card has increased to 25% APR or more. That means more of your money is going towards paying off the interest than before.

As hard as it may feel, the best time to get serious about paying off your debt, especially your high-interest debt, is now. There are lots of ways to go about doing it, but one of the smartest choices is to prioritize your highest interest rate debt first.

14. Look into inflation-adjusted investments

Treasury Inflation-Protected Securities (TIPS) are government bonds that help protect you from inflation. They pay interest twice a year at a fixed rate that is adjusted for wherever inflation is at the time.

When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater.

  • Term: 5, 10 or 30 years
  • Minimum purchase: $100
  • Investment Increment: Multiples of $100
  • Issue Method: Electronic

Related: 7 Great Short-Term Investments for Growing Your Money

15. Don’t panic (and get too aggressive with high-risk investments)

Social media is full of stories about people (people often younger than you) getting rich off the latest crypto token or NFT series. While some of these stories are true, there is no shortage of fake hype out there driven by people who want nothing more than to separate you from your money. If money is tight, now is not the time to YOLO it on a dog coin or an animal jpeg.