American families are paying, quite literally, for the reckless monetary, fiscal, and other policies enabled by government over the past two years. That cost is estimated by some economists to be an additional $5,200 per year, not exactly the kind of money most Americans have lying around. Even if you do, you would rather be investing that money than seeing your purchasing power erode.
I have been asking people the kinds of things they are doing to save money and help their families thrive, or at least survive financially, during this incredibly difficult economic time. I hope that you may find one or more tips you can apply to make your financial situation better as costs remain elevated.
Lock in pricing
Inflation means that your money buys fewer goods and services as prices increase or what you buy decreases in volume (also known as “shrinkflation”). For items you believe will continue to go up in price, try to lock in pricing today, so you aren’t paying even higher prices in the future. Talk to goods and service providers and see if they will give you a discount for bulk purchases or paying in full today. Just make sure that your goods aren’t perishable or that you can store them. For any ongoing services you pre-buy, make sure they are from companies you believe will still be in business when you need to use them.
Go to the farm
Many of my Twitter followers responded that they are cutting out the grocery store and going straight to the farmers. Some are finding friends and families to split a cow for meat, freezing as much as they can to secure better pricing. Others, with the ability to care for them, are getting chickens for eggs.
Also, many individuals are planting or canning vegetables. Dealing directly with local farmers, via the farmer’s market or contacting them directly, is helping to keep important food prices down.
One of my Twitter followers, Joe Roberts (@joereform), offered the following:
“In December, I established a local Liberty Urban Homestead Market group on Facebook. The goal is to set aside some space we have in our urban and suburban homes to grow or raise something and to exchange with others. Completely voluntary, decentralized, and P2P.”
Speaking of P2P (peer-to-peer), bartering can be an excellent way to help in tough economic times. As mentioned above, goods, including food products, can be bartered. Or, if you have a skill or a service you can offer, that is a good way for community members to work together against the inflationary environment. If you go the barter route, make sure you are very clear about the expectations of both parties (having something written down helps to avoid confusion). Also note that barter transactions are taxable (of course, the government needs to have its hands in everything!). Make sure to keep track of your bartering and speak with your accountant for guidance on how to account for this and evaluate the tax implications vs. your potential savings.
Certainly not everyone will have the opportunity reduce or cut gas usage out of their lives, but for some, with work-from-home being more accepted (if you have the type of job that allows for that), it could engender savings. Consider working from home one or more days a week if that is available to you.
Also, consider, as suggested to me by several people, rerouting your time in the car to use it more efficiently.
Ruben Sanchez, who works as in-flight crew for a major airline, now walks back and forth to the Los Angeles LAX airport, about 4.7 miles, for cost savings.
If you are going to give up driving on one or more vehicles and have a safe storage location, you may want to consider calling your car insurance company to see if you can save costs, as another of my Twitter followers suggested.
Go through your expenses and cut out anything that isn’t necessary or find another way to approach it. One of my Twitter followers said the family is doing a “staycation” instead of a traditional vacation this year. Subscriptions are often things we forget about, so go through your bank and credit card statements for the last 18 months and see where there are expenses you can cut out for the time being.
I don’t say this lightly, as moving is a serious consideration that encompasses family, work, and more. However, many people have told me that inflation is the final straw that is pushing them to take this step. One of my Twitter followers said he just sold his house in Illinois and is moving to Tennessee, where he is expecting to save a whopping $20,000 in taxes, $1,000 on car insurance, and additional cost savings as well.
This option is definitely not for everyone, but for those who may have considered it for other reasons, inflation may provide another nudge to do so.
While it is a burden we unfortunately have to bear for the time being, hopefully some careful planning and action can help you and your family lighten that inflation burden over the coming months.