How to save money when inflation is high

If you feel you can’t keep up with rising prices, you’re not alone. According to a recent survey by insurance company Primerica, three-quarters of middle-income households (those earning between $30,000 and $100,000 per year by this definition) report that their income is below the cost of living.

But if inflation is eating away at your budget, the answer isn’t necessarily to eat less avocado toast. Or drink fewer lattes. “I saw somewhere that if I cut out my daily coffee, I could reduce my happiness by 10%,” says Amy Richardson, Certified Financial Planner at Schwab Intelligent Portfolios Premium.

There are ways to cut your budget without making yourself miserable, says Chris Hutchins, an eponymous “life hacker” and host of the “All the Hacks” podcast, which in 2019 cracked 10 million credit card points.

“To me, the most important thing is knowing where you spend the most money and figuring out how to get a better return or erase the expense,” he says.

Below, Hutchins and other finance pros offer three tips for “hacking” your budget without giving up what you love.

1. Get cash back where you spend the most

It is worth examining how inflation affects you personally. “I would recommend as a starting point to do a custom budget calculation that breaks down inflation into sub-categories,” says Christine Benz, director of personal finance and retirement planning at Morningstar.

You may find that your personal budget swells differently from the overall numbers. Soaring fuel prices are a big chunk of overall inflation, for example, but won’t blow your personal budget if you don’t have a car, Benz points out.

One way to ease the burden of some of your most common expenses is to add a rewards credit card, says Hutchins. “If you spend a lot on meals or groceries, there are cards that will give you an outsized multiple on those expenses,” he says.

If you choose a card that offers solid cash back on groceries, you can go even further by buying gift cards from other retailers at the grocery store, adds Hutchins. “You still get your four points, and now you’ve managed to lower the price of what you spend at Bed Bath and Beyond.”

2. Don’t settle for listed prices

If good things come to those who wait, cheaper prices come to those who ask. “It’s no secret that you can call your cable and cell phone service providers once a year and they’ll probably offer you a better plan,” says Hutchins.

Hutchins has extended his negotiation tactics to virtually everything he buys online. “I always start live chat and say, ‘I’m going to buy this thing, is there anything you can do about the price?'” Recently, he says, the rep sent him a link who updated their cart, which then showed a significant discount on the item.

Can’t negotiate a better price for something expensive that you need to buy? See if you can find or even buy a coupon, Hutchins says. “Let’s say you’re renovating and you need to spend a lot of money at Home Depot. There are websites where you can buy Home Depot coupons online,” he says. “I needed to buy some patio furniture and bought a 15% off coupon for $2.”

3. Pick the “low-hanging fruit”

The easiest expenses to cut are those you don’t even know you have, like ongoing subscriptions. “You might find that you’re paying for a streaming service that you don’t watch much anymore,” Benz says. “These monthly fees are handy fruits.”

If you don’t feel like poring over your credit card statements, consider adding an online service like TrueBill or Trim that helps you track what you’re paying on a monthly basis. Paid versions of these services allow you to ask them to negotiate rates and cancel subscriptions on your behalf.

What’s better than keeping money you didn’t know you were spending? Claiming money you didn’t know you had. Think of it like finding $20 in your coat pocket, but on a potentially much larger scale. States have billions in unclaimed property, including uncashed paychecks, forgotten insurance policies, old bank accounts, and stocks and bonds that never made it to your current brokerage account.

If you live in one of the 40 participating states, you can search for your unclaimed property at MissingMoney.com, operated by the National Association of Unclaimed Property Administrators, or find your state’s site at unclaimed.org from NAUPA.

“People in their 30s or 40s may not find much because they haven’t had time to hoard,” Hutchins says. “But a lot of my followers searched for their parents, and it was like, ‘Wow, I found all this money.'”

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