April 2023
Barbara O’Neill, Ph.D., CFP®, AFC®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension
The U.S. inflation rate, measured by the Consumer Price Index (CPI), has been 6%+ during the 15-month period from October 2021 through January 2023. As a result, many families have spent down their pandemic era savings and are looking for ways to reduce expenses and free up money to save. The three largest expenses for many families are housing, transportation, and food.
During America Saves Week 2023 (February 27–March 3, 2023), a virtual town hall meeting provided dozens of time-tested strategies to save and cut spending. Below is a brief description of ten ideas that were shared:
Food Shopping
Cook It Yourself- Eating at home saves time (no running around for takeout) and money. To get everything you need, make a shopping list and follow it. Build in a "fudge factor" for unplanned "impulse" buys and try planning meals in weekly batches. Also, prepare food yourself (e.g., chop your own fruit and meat).
Buy Lower Cost Foods- Examples include frozen, dried, and canned foods and store brands, which are often packaged in the same plant as national brands. The only difference is the label…and the price. Using print or digital coupons (and double coupons!) and enrolling in supermarket rewards programs are other ways to save.
Transportation
Drive Less- The less time people spend on the road, the less they spend on gasoline, insurance, and auto maintenance. Ways to drive less include consolidating errands, telework, and carpooling.
Compare Prices- Apps like Waze and GasBuddy list the price of gas at gas stations in a specific geographic area. Information is obtained from their users who earn points/rewards when they report what they pay.
Housing
Downsize Your Space- Houses with less space often cost less for maintenance, property taxes, and heating/cooking. Profit remaining from the sale of a larger home can be a source of investment capital.
Rent a Room- People that landlords often charge rent to include older and younger family members (e.g., parents and adult children), boarders, and short-term guests via Airbnb, Vrbo, or similar arrangements.
Insurance
Shop Your Policies- A speaker recommended comparing policy premiums and features every 2-3 years to see if there are better deals available and to gather data to use as leverage with current insurance companies.
Increase Deductibles- When deductibles increase, policy premiums generally decrease. Do this, however, only when you have the deductible amount available in emergency savings.
Saving and Investing
Name Saving/Investment Accounts- Experts say people should save money with a purpose. Name your savings accounts (e.g., new car fund) and post pictures of goals for increased motivation and accountability.
Align Timelines- Stocks and stock-based investments are best for long-term financial goals more than five years away. Consider goals and investment features to avoid cashing out during market downturns.
For more savings ideas, review the America Saves publication 54 Ways to Save Money.