It’s no secret that inflation has been rampant this year, and may continue well into 2022. In a new report by COUNTRY Financial, 86% of Americans say they’re seeing higher prices for gasoline, while 80% say groceries are costing them more. Meanwhile, 67% are seeing price increases at restaurants, while 51% insist their utility costs are rising.
Not shockingly, more people are reporting difficulties in meeting savings goals. In fact, only 58% of Americans have managed to set aside money for savings or investments during the fourth quarter of 2021, compared to 66% during 2021’s second quarter. If you’re in a similar boat, here are some tips for keeping up with your savings efforts despite the challenge of higher living costs.
1. Bank your upcoming raise strategically
We’re nearing the end of 2021, and that means a lot of people may be in line for a pay raise at work once the new year rolls around. If you’re getting a bump in pay, a good bet is to set up an automatic transfer so your raise lands directly in your savings account, retirement plan, or brokerage account. That way, you won’t be tempted to spend it.
Now, you may not be able to send all of that extra money into one of these accounts, especially if you’ve barely been scraping by these past few months. In that case, crunch some numbers and do your best. If you need an extra $80 a month to keep up with inflation but will be seeing a $180 boost to your paychecks, that additional $100 could get sent to an account that keeps you on track with your savings objectives.
2. Cut back on some non-essentials
If saving money is important to you, it may be time to trim some non-essential costs from your budget, like takeout meals and leisure. That said, you’ll need to strike a balance between saving money and enjoying your life.
If rising living costs are driving you into debt, then unfortunately, you may have no choice but to cut back on leisure spending temporarily. However, cutting back on savings temporarily isn’t an unreasonable thing, either. If you already have a solid emergency fund and are generally doing a good job of funding your retirement plan or brokerage account, you should be in good shape to pause your savings for a little while.
3. Boost your earnings with a side job
It’s hard to save money when your everyday bills keep rising. A good way to overcome that challenge is to increase your income by taking on a side hustle.