What do you do when the cost of almost all essential goods is rising faster than your income?
I’m talking about people who have less free money because the cost of groceries, gas, insurance, utilities, and housing, to name just a few, has gone up by a greater percentage than their take-home pay.
What are your options?
This is an issue I raised in my last post, Inflation: Did Mr. Money Mustache Get It Right?, in which I disagreed with the well-known blogger’s argument that inflation really isn’t a big deal.
According to him, we should relax and enjoy the learning opportunity.
That made my eyeballs pop (and my blood boil, if truth be told).
As I argued in my previous post, the double whammy of the pandemic and inflation have had a disproportionate impact on women’s lives.
💥 Millions of us have NOT had a walk in the park for the last two years of lockdowns and rising prices.
Some women – like those in real estate, the mortgage industry, high tech, and psychotherapy – are doing well financially in the current environment.
For others, like nurses in Ontario (i.e. predominantly women) whose pay increases were capped at 1% by the provincial government, it’s not all roses and light.
(By the way, the government did not cap the pay of police officers and doctors – sectors whose members are predominantly male. 😡)
Inflation is a big deal, and it’s putting a real squeeze on many women’s finances.
Mr. Money Mustache made a number of suggestions about how to deal with the higher costs, such as don’t buy steak, perhaps switch to apples from strawberries, and avoid doing expensive repairs.
Yes, OK, we get it – buy fewer expensive things or switch to less expensive items.
But I think we need a bit more depth on inflation-busting strategies.
Here are some of my suggestions on how to deal with the rising cost of goods, broken down into 3 categories.
3-Part Strategy to Beat Inflation
Short-Term Strategies
The number one go-to strategy that people rely on when money gets squeezed is to cut back on expenses. ✂️
It’s an understandable place to start. It’s the low-hanging fruit of options.
But rather than use a generic “cut out the expensive stuff” recommendation, I’m going to take a values-based approach, as I do with all aspects of money management.
🔆 Step #1 – Chop out the low value items
Go through your spending and consider chopping out items that are not in line with your core values.
You don’t necessarily need to cut back on an expensive item you love.
You may be able to make room for that item if it’s super important to you – like the night out every month with your girlfriends 🍸 – by chopping out something else that is much lower value (i.e. a subscription or membership you hardly use).
Use your values as a guide to determine what to eliminate first.
🔆 Step #2 – Renegotiate where you can
Take a look at the biggest recurring expenses in your world.
Is there something that you can renegotiate, like your car insurance, bank fees, advisor fees (yes, they are often negotiable), your mortgage rate, cellphone package, internet bundle, or credit card fees?
Sometimes, a little comparison shopping and a quick phone call with an ask can yield surprising results.
I’ve seen this happen countless times with my clients, who freed up impressive amounts of money by simply asking for a better deal. 🎉
🔆 Step #3 – Buy in bulk with your besties
Can you benefit from economies of scale by going in with your besties to buy essentials in bulk?
Think big bags of everything at Costco here.
It’s hard to imagine a single family needing those massive bags of flour or rice, but if there’s a way to split the bags with a couple of families, that could yield some decent savings over multiple staple items.
Or could you get a deal on a major purchase by getting multiple families to negotiate together? 💡
A few years back, several of our neighbours happened to need a new roof for their homes in the same year.
They got together and negotiated a great rate with a roofing company, who benefitted from multiple jobs in a single neighbourhood. 🏘️
It saved many dollars for our neighbours and a lot of hassle for the roofing company. One stop – many customers.
Win-win.
🔆 Step #4 – Load up on sales of expensive items
I have saved our family a lot of money by checking the weekly sales at our neighbourhood grocery stores.
Their flyers come out every Thursday and I’m on them the minute they come out to see if our favorite meats are on sale. 🍗
If they are, I load up.
You can save a lot of dollars on these expensive items alone by using this strategy.
If you have the cash flow to pull this off, it’s a win. ✔️
I use the Flipp app to notify me of sales on the items and the stores I track.
There is no shortage of money-saving apps you can use. Do a search online and let technology help you easily find savings.
Medium-Term Strategies
As great as some of the strategies mentioned are, cutbacks and optimizations will only get you so far.
In order to achieve more powerful results to beat inflation, you need strategies that will help you increase your income.
In my next post, I’ll share some medium-term strategies to bust inflation. Stay tuned for those.
Today, though, I’d love to hear from you.
What strategies are you using to combat the rising price of, well, everything at the moment?
Hit Reply and let me know how you’re dealing with it in your world.
And as usual, if you have comments on what I’ve written, I’d love to hear them. Reach out! 🙋♀️
Much love 💖,
Doris
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