Tips for Spending and Saving During a Period of Inflation

October 24, 2022

The title of this post comes from a reporter who was soliciting contributions for a story. She was seeking tips for spending and saving money during inflation, and I had fun thinking through my top tips.

Spoiler alert: they don't include recommendations to clip coupons or hunker down in deprivation. That's not my jam, and, without a healthy approach to money in general, they don't do much good.

For these reason, I focus on things that will influence your money permanently. These affect you positively now and when inflation settles down.

1. Be realistic about how much your life costs.

All the parts of it! The necessities and the wants. This allows the money you do save, to stay saved. Too often savings accounts are depleted to cover a lack of planning. More on this in this recent post.

2. Don't blame yourself for your increased spending.

Costs fluctuate; that is a fact of life. Don't personalize your increased spending as a sign that you are "bad with money."  Accept that prices are what they are, that you can't directly control them, and focus on what you can control.  This might involve shopping for certain things at less expensive grocery stores. It might mean some substitutions. It might mean allocating more money for affected categories.

3.  Plan your spending.

This part is fun! There are three main reasons for and benefits of planning your spending:

  • You don't have to feel guilty about every purchase.
  • You minimize impulse purchases that only leave you feeling guilty.
  • You can feel and be proactive instead of reactive. Remembering that you have control provides a beautiful oasis of control you’ll love.

There are tools that allow you to organize your real-live money, and it stays organized. This changes everything. My favorite is You Need A Budget, or YNAB.

4. Budget for the things that bring you joy.  

If you can, continue to budget for the (small) things that bring you joy. Setting aside money in a “For Fun” budget category gives you a hit of dopamine when you put it there, and when you spend it. Knowing that you have money set aside for drink runs, a movie, a new book, or a new shirt gives you happy, small things to look forward to. And having things to look forward to feels loads better than hunkering down in a cave of scarcity and deprivation.

Some things to consider:

In the Paradox of Choice, Barry Schwartz highlights how much more we appreciate things we keep special. If you love wearing silk shirts, don't buy several. Buy and wear one occasionally. Save your favorite treats for special occasions.  You'll enjoy them so much more!

Not every thing we look forward to has a financial cost. Putting free or inexpensive things on the calendar is another way to add joy to every season of life. Brownies and ice cream and catching up on a favorite show costs about nothing. A bubble bath is basically free. Reading a good book in bed? Cost = $0.

5. Eat more meals at home.

Eat more meals at home, but make them ones you will enjoy. These can include simple meals with simple ingredients and still be tasty. My favorite is this Vegan Lentil Soup. I’m not vegan, I don’t particularly like lentils, and yet I really like this soup. It's especially amazing with crusty bread. Basically, anything paired with crusty bread is a winning meal in my book.

I’ll end with one last “bonus tip.” Don’t give up and spend with reckless abandon. When the world doesn’t end, you’ll have to face the music.

Manage your money like you’ve got a bright future, and you’ll be happier now and in the future!

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