Americans’ wallets have taken a hard hit over the last few years, and now lingering inflation and high interest rates are pushing some families to the brink.
Shoplifting increased 24% in the first six months of 2024, according to the Council on Criminal Justice’s midyear report. Following this report, LendingTree conducted its own survey on retail theft. Its findings revealed more than 20% of respondents admitted to shoplifting within the past year. Nearly 90% of those who confessed to shoplifting said inflation and the current state of the economy pushed them to steal. It should go without saying that committing a crime isn’t the way to solve the issue. But that doesn’t negate the fact that inflation has become a real problem for families across the country.
Data has shown that inflation disproportionally affects low-income families, or those on fixed incomes. A Bankrate report found that more than 3 in 5 U.S. adults without an emergency savings fund have less than $500 in the bank. The report says part of this could be because people with lower incomes typically spend more of their budget on goods that are susceptible to price hikes during periods of inflation.
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Think about the rise in gas prices or goods at the grocery store you’ve seen in the past four years. In an analysis of data from the Bureau of Labor Statistics, Bankrate found prices are 20.8% higher now than they were in February 2020. These everyday costs are taking a sizable amount from low-income and fixed-income budgets. Although there are federal assistance programs and Social Security, income limits can often put families between a rock and a hard place. So what are some practical ways to cut costs?
1. Share resources.
American culture is very individualistic. People often don’t talk about their finances, which makes it hard to seek help when you’re struggling. However, this is a time when we can share resources — a win-win solution for all of us. Consider starting a community garden or trading goods. Maybe you’ve grown a lot of veggies and fruits this summer, while a friend raises chickens. You could give some of your produce away in exchange for a dozen eggs. Carpooling to work or school can also lower your fuel expenses.
2. Find ways to cut your living expenses.
If your situation allows, moving back home or getting a roommate could be a huge help. It’s so much easier to split the bills than to handle them all on your own, especially if you have a low or fixed income.
If you’re raising a family, this may not be practical, so you’ll need to find other areas of your life where you can cut spending. Growing your own food, canceling cable or streaming services and even negotiating your bills are some ways to do this.
3. Reduce unnecessary spending.
Online shopping and social media have made it extremely easy to buy things on impulse. Don’t let this turn into a habit. Putting items in your shopping cart and letting them sit a few days can help. You may realize you don’t need the item or may have forgotten about it altogether.
Minimizing screen time or adjusting your ad preferences on your social media platforms can also help. The less time you spend online, the less you’ll be exposed to tempting ads.
Reducing unnecessary spending might also mean skipping going out of town for vacation or delaying home renovations.
4. Shop smarter.
Shopping at grocery stores like Aldi can help you lower your grocery bill. Utilizing coupons and rewards programs can also lower the bill.
Retailers like Sam’s Club, Kroger and Costco offer cheaper gas for members.
Also, don’t be afraid to look into credit cards that offer cash back or rewards for making purchases — just be sure to pay off the bill each month to avoid high interest.
When it comes to shopping for clothes or household items, consider shopping at secondhand stores or even garage sales. You may be surprised how far your dollars go.
If you want to take it a step further, consider reselling items you’re no longer using to a thrift store or at a garage sale. It could be a nice way to generate a little extra cash.
5. Don’t give up.
We don’t know just how long we’ll be living with higher prices. If you can, find ways to generate additional income. This can be difficult depending on your situation, but it can help provide a cushion. If you can’t, continue to stay the course. Make a budget and stick to it and consider leaning on your friends and family for help.
The good news about inflation is that it is coming down, as reported in the article Kiplinger Inflation Outlook: Another Good Inflation Report. A financial planner can help you come up with a plan to cut costs, create savings or find ways for you to generate income. If you’re struggling financially, don’t be afraid to ask for help.
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