Inflation hurting your budget? 5 ways you can save despite rising costs

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High inflation and the Fed’s subsequent 0.75% interest rate hike are making budgets tighter and tighter. However, there are ways in which you can manage your finances in order to save money despite these challenges. 

Here are four ways to fight inflation and keep more money in your pocket. And be sure to see whether you could be eligible for an inflation-relief stimulus check in your state.  

1. Negotiate better rates for insurance and mortgage

One way to save money despite rising inflation and increasing prices is to negotiate for better deals on the bills you’re already paying each month. When inflation is high, it’s a good idea to shop around for better rates on insurance policies.

Whether it’s your auto or homeowner's insurance, by switching to a new policy or raising your deductibles, you could potentially save a good amount each month without having to adjust your lifestyle. Additionally, if you find yourself unable to keep up with mortgage payments during times of inflation, refinancing your mortgage is another option that can free up some of your cash flow as your budget tightens.

2. Pay down credit card debt

During times of high inflation, it’s important to pay down current debts. Doing this will free up cash that would otherwise go to paying an APR and could instead be put in a savings account. Since credit card interest rates have risen from 16% to 18.1% in the past months as part of the Fed’s plan to combat inflation, you should prioritize getting these balances paid off as soon as possible.

For those facing high interest rates and finding their monthly credit card bills eating up a large part of their budget, a card with a 0% APR offer could prove useful. Additionally, keeping your credit score high will qualify you for rates on the lower end of the card's variable APR and allow you to be approved for card’s with more extensive benefits.

See our guide on how to pay off your credit card debt

3. Save on everyday expenses like groceries

Being strategic about how you’re spending your money at the grocery store will also help you save despite inflation. Shopping sale items and utilizing coupons is one way to do this, and it's made easier through apps like Ibotta or Rakuten, which provide special cash back offers to users. Additional ways in which you can save on trips to the grocery store are to eliminate food-waste by pre-planning meals, researching new recipes that use fewer or cheaper ingredients, and swapping brand name purchases to store-brand. Also, opening a card with an excellent cash back rate on grocery shopping will help you save even more.

4. Bring down your energy bills 

Unfortunately, higher inflation means higher energy costs that find their way to the consumer. With a bit of effort, however, there are ways you can decrease your payment each month. One solution to this is to get an energy audit on your home, which can be done professionally or DIY. Doing so will assess how much energy you are using and provide you with ways in which you can cut back on energy use, saving you money. The Department of Energy’s Energy Saver Guide suggests many ways to save on energy costs, including  

5. Cut back on subscription services

Re-evaluating recurring expenses on your accounts can help you save more than you might think. Surveys show that the average American spends $219 a month on subscription services and that two-thirds of consumers claim to have forgotten about at least one recurrent payment on their account.

An easy way to do this is by utilizing a subscription management app like Rocket Money (formerly Truebill) that can monitor your finances for you. This way, you’ll be able to identify where your money is going and determine if your Netflix subscription is really worth it.

Next: What the pound's crash means for Americans — check to see what this means for you. Also, mortgage rates soared past 7% this week — here's what it means for you. High-yield savings account — what it is and how to open one.

Erin Bendig
Staff writer, personal finance

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.