How to Manage Your Money to Keep Up With Inflation

Picture of calculator, notepad and $50 bill

Whether you’re filling up your tank or shopping for your monthly groceries, the costs are substantially higher than they were this time last year, and we have inflation to thank for that! 

Without a doubt, inflation plays a powerful role in the cost of everything in the economy, and as inflation increases, so does the price of everyday goods and services. 

Inflation is at an all-time high in 2022 for several reasons, including shortages in supply caused by the pandemic and Russia’s invasion of Ukraine. These happenings may seem far away from you, but they have affected the price of goods and services globally, which is why you would feel the pinch shopping at your local supermarket. 

Despite the increased prices of goods and services, salaries have remained the same for many. Unfortunately, it does not look like the prices of things will drop, so the best way to ensure you spend within your means is to find ways to manage your money more effectively. 

Keep a Money Journal

When you’re working, raising a family, managing a household, trying to keep fit, and doing a hundred other things, it’s easy to lose track of your spending. You spend money without having a plan. While this may have worked for you in the past, rising inflation means you have less money available. 

To know exactly where your money is going, keep a money journal to track every penny you spend. You can do this by recording it in the Notes app on your phone, in an Excel spreadsheet, or old-school style in a book. 

Every time you spend money, record the date, how much you spent, where you spent it, and what you spent it on. You can do this for two weeks to a month to get a clear picture of your spending patterns.

Understand Cryptocurrency Investing 

Cryptocurrency is making headlines these days, but can you actually make money via cryptocurrency investing. One thing to consider is to keep up with daily cryptocurrency news. This will allow you to understand how the cryptocurrency market works.

Understanding how the market works will allow you to make the most informed decision with managing your money in an inflationary environment.

Have a Budget

If you’ve never had a budget, now is the time to draw one up. You can use your money journal to help with this. Review the journal to determine what expenses are necessary and put these into your budget. 

There’s a debate among financial experts on the zero-based budget method. The zero-based budget entails budgeting your income down to the last cent. This means every cent is accounted for, leaving no wiggle room in your budget. 

While some financial experts believe this is the best method, especially during inflation, others recommend leaving 10-20% of your income for incidental expenses. 

The method you choose is entirely up to you. Whichever you choose, your budget must include all your monthly expenses and savings. 

Look for Ways to Cut Costs

Since you can buy less with your money, you will have to find ways to cut costs so that all your expenses fit into your budget. Your money journal can also help you with this. Review your journal, looking for necessary and unnecessary costs, and use this to plan. Consider the following:

Meal plan

Have a clear idea of what you need before going shopping. You may have enjoyed browsing the supermarket aisles and throwing whatever tickles your fancy into your cart, but this shopping method isn’t efficient in most cases. 

Without a plan, you’re likely to buy things you don’t need. If you purchase perishables and don’t use them before they spoil, you are throwing away money. 

Draw up a meal plan for the week or month, depending on how often you go shopping. Your meal plan must be detailed and include all meals and snacks. Also, consider what you pack for school lunches, car snacks for the kids, cleaning materials, and any other grocery items you may need. 

Having a detailed list ensures you don’t buy things you don’t need and don’t forget things, which will force you to make another trip to the store, which is a waste of fuel. 

Bulk buying

Shop around for specials of staples you use all the time and buy them in bulk since you always use them. Instead of going from shop to shop, compare prices online and look for the shop with the most items you use at a lower price. 

Sometimes, it’s cheaper to buy something slightly more expensive at a store close to you, rather than driving to a store with the same item cheaper, as the cost of fuel to travel there may be higher. 

Also, buy generic or store-branded items as these are usually cheaper. In most cases, the quality of the product is exactly the same, and it is only more expensive because of the branding. 

Lower your electric bill

The price of energy spikes dramatically during inflation, so it’s a good idea to find ways to lower your electric bill. It’d help if you switched lights off when you leave a room, only do laundry when you have a full load, and replace the air filter regularly. 

Invest Your Money

Even though money is tight, you have to invest for the future. When investing, it’s essential to have a diverse portfolio that can include mutual funds, real estate, and stocks. Investing in the stock market is an excellent way to beat inflation, but you must commit to it long-term. 

Also, stocks and real estate may be cheaper now. But in a few years, when the situation improves, the value of your investment will increase more than if you held the money in cash. 


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