Your Financial Future
Inflation continues to be a major financial issue for many people. While the inflation rate has come down over the last two years, prices are facing a lot of consumer resistance. The government recently reported that fast-food prices are up 33% over the last five years. Combo meals that used to cost $7.99 are now approaching $11. To feed a family of four can be a real budget buster. More upscale dining has also experienced budget-crushing price increases.
These conditions have caused more people to eat at home. The government reports that these prices are up about 24% over five years. While prices have gone up, package sizes have gone down. This so-called shrinkflation is a way manufactures try to fool consumers into thinking prices did not increase. We see that sales prices are not nearly as good of a deal. One example of ice cream that was often four for $10 is now advertised at two for $7.
To try and overcome this situation consumers must have a plan. The first step is to develop a shopping list. This will eliminate extra impulse purchases of items that you want but don’t need. Next, you need to take your list and comparison shop at different retailers to see if you can find the best price. Sometimes private label products might be able to be used in place of higher-priced brand name goods. There are also some apps that find rebates and cash back offers. When visiting fast-food locations, try using their apps or coupons to save some money.
Another area that has experienced large price increases is insurance. Auto insurance rates have skyrocketed. To help lower your premium, there are several things that you might consider. Raising your deductible can make a big difference. If you have a $250 deductible, raising it to $500 or even $1,000 can reduce payments. While you are assuming more risk, insurance should be used for big losses that can’t easily be paid. If you have an older vehicle, it might be smart to drop comprehensive and only carry liability coverage. Your insurance company will only pay you the depreciated value on the car if it is totaled. That language is included in all of the legalese in every policy. It is important to remember, if someone else causes damage to your vehicle, they must make you whole, even if the cost is more than the lower depreciated value.
To reduce homeowners insurance premiums, you can also lower deductibles and try to bundle home and auto policies into one. Also, if you have been with one insurance agency for many years, get quotes from independent agencies that represent many insurance companies. Often, they can find you a better deal.
Dealing with inflation will take a little work on your part, but you can likely mitigate some of the increased costs. Planning family outings to local parks or having a game night might also provide fun money-saving solutions. With a little creativity, you can maintain your budget despite the ongoing inflation.