Rising prices have made it difficult for many Americans to meet their monthly expenses. From housing and food to health care, the cost of nearly every major expenditure is rising. Employee wages cannot keep up. It is becoming more and more common for money coming in every month to go out at the same rate.
Moody’s Analytics estimates that the typical American household spent $445 more in September on the same goods and services as they did a year ago, due to high inflation.
Just under two-thirds (63%) of consumers were living on paycheck in September, according to new research from LendingClub and PYMNTS.com. This is up from 57% he had a year ago. According to the same report, wages rose by 4.9% last year as inflation rose by more than 8.2%.
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Many people have to face difficult choices in order to avoid running out of budget. But “the more cautious consumers shop, the harder it is for companies to aggressively raise prices,” said Mark Zandy, chief economist at Moody’s Analytics.
Here are some strategies that can help you grow your salary.
Spend strategically
To weather rising inflation, you need to be a smart consumer. Start by tracking your spending and try spending less and less often.
- Always have a shopping list. When it comes to groceries and other essentials, you may already be avoiding eating out. But even eat-in costs more than he did a year ago.when Always have a list ready when shopping for food and other essentials. This forces you to plan what you will buy before spending.
- Delay the purchase for a day or two. Take your time looking for the best deals and promotions and collect coupons before you buy. Also, if you wait a few days, you may find that the item you wanted wasn’t a mandatory purchase.
People shop at a supermarket on June 10, 2022 in New York City as inflation impacts consumer prices.
Andrew Kelly | Reuters
- Cancel your monthly subscription. After you’ve set up monthly subscriptions to cable TV and streaming services, publications, gym memberships, weight loss programs, etc., you probably never think about it, but that money keeps pulling out of your bank account or being charged to your credit. It is done. card. Stop it! Take a good look at all your subscriptions and then cut out the ones you don’t really need.
lower housing costs
After almost two years of record low interest rates, the lending landscape has changed dramatically. Average interest rates on 30-year fixed-rate mortgages jumped from an average of 4.14% in March to 6.92% in October, according to Bankrate. As such, refinancing may not currently be a viable option.
- Reduce electricity usage. Find out if there are utilities that offer lower rates. And small changes can lead to big savings. Use energy efficient light bulbs. Do not run the dishwasher without fully filling it. Don’t leave your computer running. Lower the thermostat or install a programmable thermostat.
For Homeowners:
- Please rent a room in your house. Check your state laws and check with your local housing authority to understand any restrictions or obligations. Homeowners’ associations may also have rules restricting rentals, so make sure you understand those policies as well. Contact homeowners insurance to find out if you can rent and what will be covered.
- try to get rid of privacy mortgage insurance. If you put in less than 20% when you bought your home, you need a PMI. Once you have 20% equity, you can remove it. If home prices are rising in your area, you may have enough assets to reach that he 20% threshold. If so, ask the lender to cancel her PMI. If you are in good standing and haven’t missed your mortgage payments, they have to comply.
For lessees:
- Consider finding a roommate.
- negotiating rent reductions. If you don’t ask for it, you won’t get it. Please consult your landlord. Be honest about your financial situation and suggest monthly payments that you can afford. Offer to do the repairs yourself to keep the rent down. If you expect rents in your area to continue to rise, extend your lease at current rates now.
The more cautious consumers shop, the harder it is for companies to aggressively raise prices.
Mark Zandy
Chief Economist at Moody’s Analytics
reduce credit card debt
Interest rates are at record highs and rising. According to him, the average annual rate (APR) of those who have a balance on the credit card is 18.43%. lending tree. The rate offered on the new card is even higher, at 22.21%, the highest since LendingTree began tracking him in 2019.
- Switch to transfer card with 0% balance: Most offers last 12-15 months, but interest-free periods of up to 21 months are also available. Beware of fees in the range of 3-5% of the amount transferred. “If you have enough credit to get a credit card, it’s your best weapon against credit card debt,” said Matt Schultz, chief credit analyst at Lending Tree.
- For lower rates, please contact your credit card issuer. According to an April 2022 survey by Lending Tree, about 70% of people have asked for a lower interest rate on their credit card. The average reduction was 7 points.
- Consider debt consolidation. You can pay off your debt faster by making one monthly payment at a lower interest rate. Get a free consultation with a nonprofit credit counselor to help you develop a debt consolidation and debt management plan. Find a counselor through the National Foundation for Credit Counseling on NFCC.org.
Take advantage of rising interest rates
If you have any extra money left over after paying the necessary household expenses, be sure to pay for it yourself.You can do it Make that money work for you in a high-interest savings account. According to DepositAccounts.com, the average interest rate for the most profitable online savings accounts is 2.34%, with some as high as 3%. So if you have extra cash, stash it away.
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