Although inflation has stabilized over the past few months, the past year has been a rocky one for people on fixed incomes or unable to get salary increases. And with OPEC+ cutting oil production, it doesn’t look as if gasoline or home heating oil will be dropping in price any time soon.
Seniors on Medicare may get a little help with prescription drug costs, but otherwise, unless you find a way to get more money to come in – perhaps a seasonal part-time job? – you’re going to probably need to make a few cuts in spending.
The first step is to see where you’re spending. It may not be as obvious as you think. When I was in college, I had a job my freshman year, and was still always running out of money. I couldn’t figure it out. So, for two months I tracked every cent I spent, and I quickly learned that I was playing too much pinball. Way too much. Around $40 a week back when I could eat lunch for under $5. I cut back on the games and I had money to go to the movies.
You should also itemize your expenses. You may be buying the same items in the grocery store as last year, but some may have doubled in price while others are only up 10%. You can try the tried and true method of discount shopping: Scout for coupons and sales. Buy store-brands instead of the big names. Yes, I like Coca-Cola better than GeneriCola also, but if the former is 12 cans for $8 and the latter is 12 cans for $4, I’m no longer having a smile with my Coke. Whole Foods is a blast, but Walmart also sells cereal, and you may have to go skip your organic, stone-ground, low-salt, blue corn chips. Skipping little luxuries can add up over a month.
Walking a few blocks every day instead of driving, could mean saving an extra fill-up per month. Plus, you may feel better.
See if you can save on big ticket items such as car insurance or health insurance. Just $20 a month in savings can add up to $240 a year. That will buy a few presents at the holidays. If your credit is good, see if you can get your credit card company to give you a lower rate or switch to another company offering a lower rate. But make sure it’s really a lower rate and not a come-on that’s going to cost you more in the long run. Make sure your living quarters are energy efficient. The last thing you want to spend money on is air being blown out the cracks in your house or gaps in your doors and windows.
Then there’s the easy stuff: Don’t run the dishwasher for a few dishes; don’t do the laundry when you only have half a load. Saving water and electricity can save you money. Limit your expensive coffee purchases to a treat instead of a daily occurrence. Check out your local library before buying another book (although we fully support buying books).
Take another look at your investments, if you’re fortunate enough to still have any. If it’s going to be a rough year for stocks, maybe take a breather. Look to invest in a higher-yield government bond (one thing inflation is good for is bond yields) or a stock that yields a strong dividend.
And if you’re still working, ask your boss for a raise. You deserve it.