When Prices Are Rising

Find Your Own Inflation Rate

The inflation number in the news is an average across everything people buy. Yours depends on what you buy. If you drive a lot, rent, or have a family to feed, your costs may be rising faster than the headline number. If you own your home with a fixed-rate mortgage, perhaps slower.

Pull up three months of bank and card statements and compare them with the same months a year ago. Look at groceries, gas, insurance, utilities and rent. Those five usually explain most of the squeeze, and they are where to start.

Cut Where the Increase Is

• Groceries. Compare the unit price on the shelf tag, not the package price. Packages shrink while the price stays the same. Store brands, a weekly plan and a list cut the bill more than coupons do for most households.
• Insurance. Premiums have risen sharply in recent years. Get new quotes for auto and home or renters insurance every year, and ask what raising your deductible would save. Only raise it if you could cover the higher deductible from savings.
• Phone, internet and subscriptions. Call and ask for a better plan or a retention offer. Cancel subscriptions you have not used in a month. These are easy to fix once and save every month after.
• Gas. Combine trips and compare prices with an app. Driving gently and keeping tires properly inflated also save fuel.

Watch Your Debt

Rising prices often come with rising interest rates. Credit cards and other variable-rate debt get more expensive when rates go up, even if you do not borrow another dollar.

• Pay down credit card balances first. They usually carry the highest rate you have.
• Avoid putting everyday costs like groceries and gas on a card you cannot pay off in full. That turns a price increase into a price increase plus interest.
• If you are carrying balances on several cards, ask KCCU whether a consolidation loan would cost less in total. See KCCU loans →

Make Your Savings Work

Money in a checking account loses value when prices rise. Keep your emergency fund in savings you can reach within a day. For money you will not need for a set period, a share certificate usually pays more than regular savings.

Keep contributing to retirement, especially up to any employer match. Stopping to cover higher costs today means giving up free money and years of growth.

Raise Your Income If You Can

Cutting costs only goes so far. If your pay has not kept up, it is reasonable to ask for a raise. Look up what similar jobs pay in your area, write down what you have taken on in the past year, and ask. Overtime, a side job or selling things you do not use can also close a gap while you work on the bigger fix.