As many economists have been predicting, a major inflation period is coming. Most people in this country are already on tight budgets. However, the coming inflation will require consumers to be even more clever about how they spend their money. Although this news is disheartening, there are several ways to cut expenses without living like cavemen.
1. Optimize Insurance Coverage
It is not wise to make cuts to home insurance, and it is smart to keep existing medical coverage if it is good. Compare some quotes for these, but do not skimp on insurance. One of the most overlooked expense cuts in insurance can be found on an auto policy. Many people qualify for discounts, and some consumers could easily find a more affordable policy. The first step is to compare auto insurance quotes online. Most people are surprised at how much they can save by doing this.
2. Reduce Utility Bills
There are several ways to do this. Turn off lights when they are not in use, and buy efficient light bulbs. Do not leave anything plugged in that holds a charge. Plug major electronics into a green power strip to save on energy. After washing clothes, hang them outside to dry. Put them in the dryer for no more than 10 minutes to finish the process. Keep the thermostat lower in the winter and higher in the summer. Make a conscious effort to use as little water as possible. For example, turn off the shower while soaping up, and set the dishwasher to only one short rinse cycle.
3. Cut Unnecessary Expenses
Make a list of all monthly expenses. Put a mark next to any item that cannot be cut. Utilities, mortgage payments and insurance are all such necessities. Put marks next to items that can be reduced. For example, a cable package or cell phone plan could be reduced. If there are items that are not necessary, cross them out. Magazine subscriptions, coffee club memberships and other such expenses should be temporarily suspended or completely canceled.
4. Pay Off Credit Card Debt
Since no person can predict what will happen during a time of greater inflation, it is best to enter the period without debt. It may not be possible to pay off all debts, but it is important to pay off the ones that have the highest interest charges. By cutting monthly expenses, there should be more money to do this. Pay credit cards down to a zero balance. If possible, pay off any short-term loans that still have balances.
5. Stock Up On Supplies
Food prices always rise during inflation periods, so stock up on any items that can be frozen or stored. Since disasters are rarely predictable, it is also good to stock up on survival food. Oatmeal, rice, beans, water and canned goods are great items to have for possible disasters.
Individuals should also examine their investment portfolios. Gold and commodities are generally the best investments during inflation periods. There are several other ways people can cut expenses to combat the impact of inflation, but each person must examine his or her own finances to find these ways.
Pete Schilling is a writer for AutoInsuranceCenter.com who specializes in personal finance and insurance topics.