Cut your budget strategically and fight rising prices and rates

Cut your budget strategically and fight rising prices and rates


Kimberly Palmer

Consumers face rising prices almost everywhere they go, including basic things like gas and food. At the same time, rising interest rates may translate into higher credit card payments for people who have debt every month.

This double wave of higher costs of daily expenses and debts translates into a greater financial burden on people’s budgets. While consumers can’t do much to change these macroeconomic factors, they can offset them by looking for new ways to save in some popular spending categories.

“Now it’s more important than ever to control your finances and spend on purpose,” said Andrea Woroch, a consumer finance expert based in Bakersfield, California. “It could be an opportunity to reduce unnecessary spending from your budget in a way that doesn’t cause more casualties.”

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Here are five strategies that can help you.

Reduce gasoline costs by driving smarter

You can drive less and, as a result, spend less on gasoline by rides, grouping errands and using apps to plan the most efficient route, says Barbara O’Neill, owner and CEO of Money Talk, a financial education company based in Ocala, Florida. as Wanderlog to create efficient routes from point A to point B, especially for long journeys by car.

O’Neill says it pays to plan where to buy gas at the lowest prices. “Prices vary by state, but also in the same area,” he says, and applications like Waze and GasBuddy can help. Paying in cash can also bring savings because many gas stations charge less for cash transactions, he adds. If you prefer to use a card, credit cards with gas rewards can help you get more points or a refund.

Taking care of your car by checking your tire pressure and keeping it up-to-date through inspections helps your car run more efficiently, says Ellen Edmonds, a spokeswoman for AAA. “Underinflated tires reduce fuel consumption by 5%,” he says. It also recommends driving at 50 miles per hour whenever possible, as fuel consumption peaks at that speed.

Edmonds warns of idling for more than 10 seconds: “It may seem unintuitive, but turning the car off and on again if you idle for more than 10 seconds will save gas.” Car engines use a quarter to a half gallon per hour of idling. explains.

Stretch your food budget

Woroch says the easiest way to spend less at the grocery store is to curb impulsive purchases, “whether you buy an extra bag of chips or something else you don’t need.” You will save, even after deducting the delivery fee, if this means that you will avoid grabbing extra things or things that could be wasted. If you go to the store, he says, “Take a hand basket, because you can’t put anything in another. than what you need. “

Making money back through credit card rewards or other loyalty programs also helps get rid of rising prices, says Woroch. He recommends using CouponCabin to find refund offers in various stores.

Reduce variable entertainment costs

O’Neill says the search for free entertainment activities begins with subscribing to Eventbrite Alerts, an event management system that showcases local events, some of which are free or inexpensive, and by following your city’s Facebook page or Twitter channel. “Then you will be notified of events that are happening in your community,” he says.

If you have a store membership at a store such as Costco or Sam’s Club, Woroch recommends buying discount gift cards for restaurants, cinemas, theme parks and other amusement parks if you still plan to spend money on these locations. And as with spending food and gas, using credit cards that offer bonus rewards or cash back for fun can help you earn extra points or cash back.

Build more savings on your high-yield account

High-yield online savings accounts are often the first to respond to interest rate increases from the Federal Reserve, which means your money can start earning more from those accounts. “If you leave your money in a traditional bank, you lose free money, so take advantage of these high-yield savings accounts,” says Woroch.

Repay the debt with high interest rates

Finally, rising interest rates mean that credit card debt is becoming more expensive, so repaying it as soon as possible is a smart step. Debt repayment can be difficult when you also pay more for everything; You may want to consider finding ways to temporarily make more money.

Once it finally pays off, “you can turn those debt payments into savings payments and strengthen your savings accounts,” says Woroch. This approach allows you to take advantage of rising rates instead of falling victim to them.

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