With prices on the rise, it’s natural for inflation to be top of mind. According to a survey, 63% of consumers feel off track financially due to inflation.1 Inflation can be felt in our day-to-day lives from gas prices, food, travel, housing, and much more. While we can’t personally change inflation, we can focus on different ways to save money throughout the year. We’ll discuss what is causing inflation and how to save money with these personal finance tips.

What is causing inflation?

Inflation is a measure of the rate that goods and services are rising in the economy. Inflation can occur nearly everywhere, from basic daily needs and services such as food and housing to luxury goods, such as cosmetics, vehicles and more. When inflation is rising, it can decrease consumers’ purchasing power. If the inflation rate in a given year were 5% and your yearly salary increase were only 3%, you would have less purchasing power in the next year. So what exactly causes inflation? There are a variety of factors that can play into the inflation rate rising, but we’ll break down a few here.

Supply and demand

When consumers want to spend more with cash or by accessing extra credit, businesses could raise prices due to not being able to keep up with supply at the rate that consumers are wanting. Businesses also might see this as an opportunity to raise their prices more without losing customers because demand is so high that enough consumers will continue to buy.

Supply chain issues

Supply chain issues can also lead to increased inflation. The coronavirus pandemic forced many factories to either shut down or limit production. This led to decreased supply across many industries. On top of that, there has been a

shortage of workers across multiple industries, causing some manufacturers to ship in products from other regions or nations, which is more expensive than producing goods in house. In short, there is often not one single issue that drives the increase in inflation.

How to deal with inflation

While inflation may seem daunting, there are steps we can take to help ourselves save money and lessen the sting of rising prices.

Make a budget

One good step in limiting the impact of inflation on your finances is making a budget. Having a budget can help you track how much you are spending each month in order to hold yourself more accountable for the money leaving your pocket.

You might be spending more than you realize in some areas or find that you have a recurring expense that you forgot about. You can then reallocate your spending to different areas, invest your money or save some money based on your goals. For more information on how to create a budget, view these tips from The Balance or start developing a realistic plan with our budget worksheets.

Save money at the grocery store

While many of us are feeling the extra cost of food and groceries, there are many ways you can grocery shop on a budget. Check out these 14 ways that you can save on groceries so you have that money to use elsewhere.

Save on transportation costs

Using alternative modes of transportation, such as public transportation, walking, riding a bike and more, helps cut costs on gas. If possible to work from home, take that option so you don’t have to spend money getting to and from work. Also, carpooling with friends and family helps with saving money.

Reduce or pay off debt

Paying off any debt that you might have can help when the prices of goods increase. If your debt is credit card-related, look for a low-interest personal loan or 0% APR balance transfer offers. Another good idea might be refinancing your student loans to secure a lower rate.

Vacation planning

Just because you’re budgeting doesn’t mean you can’t take any vacations. It’s important to be smart when planning, however. For example, if your destination is within 800 miles, it might be better to drive instead of flying to cut some costs. If it’s necessary to fly, book flights early to find the best air fare. Schedule your trip to avoid peak traveling times, such as holiday weekends.

Make extra money with a side job

Side gigs have become increasingly popular these days, and many of us look for some extra cash to meet our financial goals. There are a variety of ways you can make extra money with a side job, depending on your time commitment and how much you are looking to make. Here are 13 side jobs that provide a high reward for low commitment.

Invest and stay invested

Investing can be a way to get out ahead of inflation and potentially receive a better rate of return on your money. Traditional savings accounts will probably not provide a larger rate of return than the cost of inflation, so you may not be taking full advantage of your money by leaving it all in a savings account.

Nationwide has many different options when it comes to helping you prepare for your financial future with investing and retirement. Use our resources to learn more about annuities, life insurance, mutual funds, ETFs, retirement plans and more.

Take advantage of insurance discounts

Insurance discounts are also a great way to keep yourself on budget and save some extra money. Nationwide offers discounts on car insurance and gives our members a variety of ways to save. We also believe that dependable homeowners insurance shouldn’t strain your budget. View our full range of available home insurance discounts to help yourself start saving more today.

Work with a financial professional

To make sure you are staying on track with your financial goals, a financial professional can help with money and retirement planning. They can use their expertise to help develop financial plans to secure your financial stability. No matter your stage of life or where you are in your retirement planning, you can find a financial professional who fits your unique situation to help you reach your financial goals. Find a financial specialist that can help you with your investing needs.

Next Steps

While we can all certainly feel the sting of inflation in our daily lives with the products and services we buy regularly, there are various ways that we can work to save money. Whether it’s making a budget, finding ways to save at the grocery store, investing, finding a side job or using Nationwide’s insurance discounts, find what works best for you to save money in your daily life.