You can’t change the economy, but you can change your spending.
Americans are seeing the cost of everything from food to fuel continue to inch up thanks to pandemic-related labor and supply shortages.
New data from the U.S. Bureau of Labor and Statistics shows that in the last year, prices have risen 5.4%, which tracks with reports from recent months. The prices of some products, like gasoline and used cars, rose at much higher rates.
If it feels like your budget is stretched thin, you’re not alone. Nearly two-thirds of consumers surveyed by YouGov for personal finance site Bankrate in August said that rising prices have had a negative impact on their personal finance situations. And about 20% said they’ve had to rely on credit cards, loans or help from family and friends to get by.
Before adding to your debt to cover extra costs, here are a few things to try that could help you save in the costliest areas.
Soaring gas prices might require a change in how you drive
Gas prices rose 41% between September 2020 and September 2021. By those numbers, if you paid $2 a gallon last year, you would have paid $2.82 this year.
The obvious option to save money is to drive less. Carpool, use public transportation or walk or bike if you can, but that’s not feasible in a lot of American cities.
In that case, take a look at how you drive. Aggressive driving where you brake and accelerate rapidly can reduce gas mileage anywhere from 10- to 40% according to the U.S. Department of Energy. Instead, braking and accelerating slowly where possible can save anywhere from $0.32 to $1.27 per gallon.
Similarly, you may find that taking a route that avoids interstates could help save money. You lose gas mileage at higher speeds. Every 5 miles per hour you drive over 50 miles per hour is like paying an additional $0.22 per gas, according to the DOE.
You can also avoid hauling cargo on the roof of your vehicle, and reduce the weight of anything you’re hauling inside your car.
Wait to buy a new car if you can
Used cars in particular have seen a big price hike at 24.4% in the last year, compared to new vehicles at 8.9%.
The best thing to do if you need to buy a new car is try to wait it out a few months. Rather than increasing in August and September, the price of used vehicles already began to decrease.
If waiting isn’t an option but you have a car that still has some life in it, now’s a good time to sell. Prices are going up partially because there’s a supply shortage, so dealers will be eager to purchase your existing car as a trade-in. Shop around to see who will make the best offer.
After that, use the same process for finding a vehicle and financing option that’s not going to hurt you in the long run. Figure out your budget and then shop around at multiple sellers and banks to find the best fit for you. But keep an open mind – being flexible in the type of car you’re looking for can help cut costs as well.
Conserve energy to conserve your cash flow
Energy services like electricity and gas saw a combined spike of 8.5% over last year. Compared to the price of gasoline, it’s not much, but it’s also an area ripe for trimming costs.
Start with the obvious: Use less electricity. Turn lights off and unplug appliances when you’re not using them, try to be quicker when you shower and blowdry your hair and turn the air conditioning and heat off when you’re not there or don’t really need them on.
Rethink how you do some things. Your water heater and your dryer are big energy hoarders. You can adjust your water heater to be a few degrees cooler and wash your clothes in cold water, and consider air-drying your laundry. Similarly, you can adjust the temperature in your fridge and freezer to be slightly warmer and avoid turning the oven on.
If you’re really at a loss, check with your utility provider. They can often provide energy audits for free that can show where you’re spending the most money. And like any service provider, directly asking if there’s a way to reduce your bill can go a long way.
Published by Debt.com, LLC