6 ways to save money as prices continue to rise
Inflation is hitting everybody hard these days as the prices of goods rise, often independently of wages. Purchases that many people used to be able to save on are now eating up entire paychecks. This means that in order to make sure you can keep saving, you’re going to have to try some new tactics. Here are a few ways to continue to save money as prices rise.
1. Round Up Your Purchases
It seems slow going to attempt to save by putting away a few cents a couple of times a day. But in truth, even small amounts of money build up — just look at your coin jar! With the right debit card, you can take advantage of round-up savings, the coin jar’s digital equivalent.
Each time you make a purchase, the card’s app will round the total up to the next dollar. Then it puts the extra amount it took to reach that dollar into your savings account. Say you order a $4.50 scone at the bakery. The card will remove $5 from checking and squirrel away the remaining 50 cents. This digital loose change will add up sooner than you think!
2. Budget for Savings First
The priority of a budget is to ensure you have enough money for bills and living expenses each month. Afterward, it can help you put your money toward savings and other less urgent things in your life. But although they’re technically less “urgent” than needs like rent, savings aren’t far off in terms of being necessary for success. That’s why it’s worth prioritizing savings by ascribing them the same importance as a bill.
What this means is setting aside your savings — perhaps 10% of your pay per month — before looking at non-necessities. If you earn $2,000 in monthly income, and your necessities are $1,200, you could save $200. This leaves you with $600 to spend freely. By putting that $200 away first, you’ll be less tempted to spend it. Out of sight will be out of mind, to the benefit of your financial future.
3. Allocate Funds for Impulse Spending
That’s not to say that non-necessities — aka wants — are unimportant. Occasional impulse purchases can even be good for your mental health. So while they’re considered unnecessary, that doesn’t mean they’re wasteful or foolish. If you budget well, you can allow yourself a certain amount for these types of expenses. It won’t do your mental health any good to skip a museum trip with friends for penny-pinching’s sake.
If impulse spending is something you struggle with, the practice of budgeting a set figure for it will help you keep things under control. You still get to do it and have that fun, but with a healthy limit to prevent rash decisions. If you exceed your fun budget one month, don’t beat yourself up. Just adjust it and your mindset a bit next month.
4. Redirect and Double Purchase Totals
While budgeting for wants is a helpful tactic, it is true that reaching your savings goals will require avoiding nonessential purchases overall. One strategy is to avoid a transaction altogether and put the money you would have spent into savings — redirect it. Alternatively, you can make the purchase and take a moment to multiply the cost by two. However much you spent, put an equal amount into savings at the same time.
These tactics are exercises in self-regulation. They help you develop the habit of second-guessing some impulses and taking care when giving into others. Remember that indulging impulses isn’t inherently a bad thing, but doing so too often will sap your savings efforts. These exercises can serve to strengthen your self-discipline.
5. Reduce Food Waste
Because of how essential they are, grocery runs can easily slide under the radar when you’re thinking about ways to save. You’re always going to need to eat, and you’re not dining out, so shouldn’t you focus your money management elsewhere? Not necessarily. Think about how you use the food you buy, what often goes to waste, and how you can avoid that. After all, waste is the polar opposite of saving.
Sometimes ingredients go bad before you can use them. Fortunately, proper storage can often forestall this and prevent you from having to rebuy them. Many herbs, for instance, come in refrigerated containers but will last much longer if you store them a different way. The same goes for vegetables that you might assume go in the fridge but truly thrive at room temperature. The money you save from not having to repurchase spoiled produce can go directly into your savings account.
6. Purchase Necessities Mindfully
You can create further savings opportunities by reducing your expenditures on necessities. A little bit of pre-planning before you shop gives you the chance to circumvent larger costs down the line. For example, warehouse stores like Costco are great places to get long-lasting staples like rice in large quantities. Buying your most-used supplies and foods in bulk cuts their costs significantly and is simply more convenient over time.
For non-grocery necessities, you’ll want to do some research into how to get the best bang for your buck. A low-quality screwdriver may be cheaper, but a high-quality one will last long enough to make up for that. By investing in high-quality items, you’ll avoid being — as the saying goes — penny wise and pound foolish.
Unfortunately, there’s not much you can do to avoid inflation whatever type of lifestyle you live. But that doesn’t mean you have to abandon your efforts to build up a nest egg. Luckily, these tips can give you a head start as you look toward the future. Before you know it, your savings account balance will be higher than ever before.