For nine consecutive months from March to November 2021, inflation in the United States stayed above the target of the Federal Reserve Bank of two percent, according to Trading Economics. In November, the annual inflation rate peaked at 6.8 percent. This was the highest in 39 years since June 1982.
CNBC reports that according to data from the Bureau of Labor Statistics (BLS), prices of food in general increased by 6.1 percent from 2020 to 2021. Taken together, prices of poultry, meat, and fish increased by 13.1 percent. Milk increased by 4.6 percent, while vegetables and fruits together increased by four percent. The cost of electricity increased by 6.5 percent from 2020. The price of clothing increased by five percent. The price of gasoline increased by 58.1 percent. The prices of new vehicles rose by 11.1 percent, while the prices of used vehicles increased even more at 31.4 percent.
Prices will continue to increase in 2022. The U.S. Energy Information Administration’s (EIA) Winter Fuels Outlook 2021 report states that household’s heated by natural gas will shell out 30 percent more this year, those using oil will shell out 43 percent more, those using propane will shell out 54 percent more, and those using electricity will shell out six percent more.
Healthcare will likewise be more expensive. Data from the Centers for Medicare and Medicaid Services show that prescription drug plan premiums will increase by five percent. Medicare Part B premiums will rise by 14.5 percent.
With everything getting to be more expensive and salaries not catching up, it is time for belt-tightening this year. Your lifestyle must adjust to the times and your income.
Minimize Your Debts
If you have a mortgage, you must have refinanced it by now to take advantage of the low mortgage rates last year. If you have not yet done so, work on this immediately before mortgage rates rise. It will lower your monthly payments.
If you have several credit cards, consolidate them into the one with the lowest interest rate. You will only have one payment a month and save on interest.
Stick to Necessities
Sit down and review all the things you are spending on. There may be subscriptions you can do without. Streaming movies and television shows are necessary for entertainment since it is not safe to go to cinemas with Omicron around. You do not need many services, though. Choose to retain the one that you use most.
Consider canceling your gym membership. It will lessen your exposure to Omicron. You can do workouts at home and in open spaces without crowds. Breathing in fresh air is better for you.
Prepare all your food at home. This is much cheaper than ordering for delivery. Plan your meals according to what is on sale when you go to the supermarket. Also, go for inexpensive but filling and healthy food as the base of recipes. These include whole grains like brown rice as well as beans. Beans also provide protein, so you do not have to buy much meat. Use just a little meat to add flavor to dishes. Ground lean poultry, beef, or pork can go far when combined with whole grains and beans in recipes. When you do purchase meats, choose the tougher cuts that are cheaper but tastier when tenderized in a pressure cooker. Add a lot of vegetables but choose the cheaper greens over the expensive ones.
If your cash flow can handle it, buy items in bulk because these come out cheaper. Choose house brands of the supermarket instead of brand names. Products packaged as refills are also cheaper. Collect coupons and use them.
Avoid False Economizing
Eat healthy while watching the costs of the food you purchase. Do not replace fresh food with cheaper fast food or junk food. It is more expensive to get sick.
Unless something is unrepairable, repair it instead of replacing it. If it needs replacement, see if you can reuse the damaged item in another way. For instance, keep broken pieces of ceramic cups, saucers, bowls, and plates and put them at the bottom of pots before adding soil. These prevent the soil from clogging up the holes at the bottom of the pots and enable proper drainage for plants.
When you need to purchase something, opt for good basic quality. This does not include all the fancy bells and whistles. For instance, if something in your bathroom gets busted and needs a replacement from a Banner Solutions hardware, do not automatically go for the cheapest item. Compare the specifications of different brands and choose a mid-priced one that will last longer.
Save for the Rainy Days
Although these are already hard times, it is best to prepare for even more difficult times ahead. If you can set aside a few dollars extra, do not consider this something you can splurge, Instead, save every dollar or even penny that you can as a buffer for any emergency or future needs. You will thank yourself when that time comes.