Strategies to save and spend less

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 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.

  • 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

Your biggest monthly expense is likely your housing bill, and you may be spending more than you’d like. Many financial experts recommend spending no more than 30% of him on rent, but lenders recommend spending no more than 28% of his monthly gross income on housing costs to take out a mortgage. I hope

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

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