In 2021, the inflation rate in the US increased from 3.2% to 4.7%. Statistics show a substantial increase in prices in 40 years. As of June 2022, food prices have increased by 10.4%, energy prices have increased by 41.6%, and gasoline prices have increased by 59.9%. These high inflation times have left most of us in a terrible financial position. Can there be anything done about it?
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The high prices for necessities have left many of us in a difficult situation financially. We can help you get your finances back on track. Here is the complete guide to these surviving high inflation times.
Assessing Your Spending Habits
The first thing to do to save money is to assess your spending habits. If the increased prices are completely ruining your budget, try to get an idea of where your money is going. Make a note of the money you spend on necessities like rent, groceries, utilities, and transport. This will help you identify the money that is spent on frivolous activities. This reassessment of your spending habits will help you press pause on unnecessary expenditures.
Cutting Unnecessary Expenses
You may think that eating out once or twice in a fancy restaurant or buying expensive clothes might not hurt your budget, but it does. If the high inflation has hurt your monthly spending, try not to waste money on subscriptions and dine-outs. It may seem like a tough decision but it will pay off in the end. You can splurge once you have a good amount of savings. However, monthly frivolous spending can add up to a significant amount.
Creating and Sticking to a Budget
Some people do not write down the purchases they make after getting their salary. They are then confused about where the money went at the month’s end. Creating a budget can prevent this situation.
In a budget, you need to write down all your expenses and the amount of your salary. The golden 50/30/20 rule says you need to spend 50% of your income on necessities, 30% on wants, and the remaining 20% needs to be put in a savings account.
You do not have to keep a notebook around for keeping an account of your spending. You can simply use the notes app on your phone. Note down every purchase so you have a clear idea of where your money went. This way you can cut back on expenditure in the following months.
Consider taking up another job to add to increase your income. Freelancing is an excellent option. As a freelancer, you can control the number of projects you take on and the time of the day, you work. You can easily manage freelance work with your main job. About 75% of Americans reported making more money while freelancing than they did in their main job. Therefore, freelancing might just be the answer to your financial woes.
Taking Care of Your Mental and Physical Health
These are tough times for all of us. With rising inflation and decreased buying power, people are stressed, and their mental health is disturbed. However, you will never be able to perform well professionally if you are not physically and mentally fit. Take good care of your overall well-being to give your best in every avenue of your life.
You do not have to go to the gym if you cannot afford it. Try working out at home. There are many free apps and YouTube videos with guided workout tutorials. Furthermore, several online platforms offer helplines and counseling for those suffering from poor mental health.
Try to get the best value for your money. Wait for sales and discounts, to get good quality products at a discounted price. There is no shame in shopping from sales.
With high inflation and low morale, people are struggling to sustain themselves in these troubling times. Follow these pieces of advice to make the most out of your money. Keep a positive attitude, be patient, and do not let the stress of difficult times get to you.