Jun 2, 2021
The economy is on the rebound after a sharp dive last year when the pandemic hit.
But as the economy recovers, inflation is on the rise too: In April, it accelerated at a pace not seen in more than 12 years, according to the Bureau of Labor Statistics.
Advertisement
What does that mean for you? Prices for everything from gas to groceries have skyrocketed, making it even more important to shop around for deals to stretch your pennies.
Here are seven savvy ways you can keep your personal inflation rate in check and ride out any ups and downs in the economy without paying the price personally.
Control your home renos' hidden costs
At the start of the pandemic, with everyone stuck at home and left with tons of disposable income they’d typically use for travel or dining out, home renovation activity surged.
And based on the results of a study from the Farnsworth Group and the Home Improvement Research Institute, that activity hasn’t slowed yet.
However, home renovations may increase the value of your home, which can lead to a more expensive homeowners insurance premium.
If you went ahead and did renos over the last year and you’re paying for it now, it may be time to shop around for a better rate to potentially save yourself hundreds of dollars a month.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
- Vanguard reveals what could be coming for U.S. stocks, and it’s raising alarm bells for retirees. Here’s why and how to protect yourself
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Deal with debt
Though credit card balances sank during the pandemic, according to stats from the Consumer Financial Protection Bureau, joblessness rose a notch in June, to a relatively high 5.9%, but nearly half of the states are planning to the federal government's bonus unemployment benefits shortly.
If you’ve been relying on that money to help stay on top of your credit cards, you may need another solution.
Advertisement
A debt consolidation loan with lower interest could help you get rid of your debt sooner and save you a ton in expensive interest.
Stick closer to home — for now
Did you have a trip on the books that was cancelled because of the pandemic? Like many Americans who’ve now received their COVID vaccine, you may be thinking about cashing in your vouchers.
Sadly, this is one expense you may want to book immediately or put off for a bit. As of April 1, prices on domestic flights were up 9% and 17% for international travel, according to a report from research firm Bernstein. And prices are expected to continue to tick upwards.
The cost for a hotel stay is also going up. Between mid-March and the end of April, Koddi, a travel booking technology company, noted an appreciable increase in the average hotel price. Compared to just a few weeks earlier, they were 11% more expensive, Koddi’s senior director of client services, Deep Kohli, told CNBC.
So maybe you’re thinking you’ll just book a road trip? Gas prices are way up, too.
Instead, think about sprucing up your home or backyard to find your own luxury escape right at home.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Don’t let the dealership take you for a ride
Advertisement
Not only is the price of gas going up, but so is everything else relating to your car.
The car-shopping experts at Edmunds say the percentage of consumers overpaying for a new car climbed to 12.7% in April, setting the record for the highest level since 2002.
On top of the significantly higher sticker price, a new car will lose about 30% of its value in the first year, according to Edmunds. Buying a used car could save you up to $1,400 on your purchase.
And while some auto insurance providers have been handing out pandemic stimulus discounts, as the country continues to recover from COVID, those may soon end.
Make sure you’re getting the best possible rate by shopping around and comparing multiple auto insurance offers — it only takes a few minutes and it could save you up to $1,100 a year.
Ditch the fees, invest for free
There are few better ways to grow your money than by investing it. Just think: if you had strategically invested your first stimulus check, within the year you could have doubled your money.
But with most platforms, you’ll face pesky investment fees taking a big bite out of your profits — generally somewhere between 1% to 2.5% — which can add up to a huge chunk of change over the years.
Advertisement
If you want to hold onto more of your hard-earned cash, you should to consider an investment app that features no commissions, which allows you to invest for free.
Slash the cost of your mortgage
Mortgage rates have been yo-yoing over the last several months as the economy continues to recover from COVID, with January recording the lowest levels on record, after which they’ve been steadily climbing.
They’re still currently at historically low levels, but experts predict rates will rise to 4% this year — making now the time to make a move if you’ve been mulling a refinance.
An estimated 14.1 million Americans have the opportunity to refi and save an average $287 a month, according to recent research from the mortgage technology and data provider Black Knight.
Take a healthy bite out of health premiums
On average, health insurance for a healthy 40-year-old across the country will cost you $5,940 over a year, based on analysis from ValuePenguin.
With new opportunities to save through tax credits on your premiums this year, most Americans will see a noticeable drop in their health insurance costs for 2021.
But that doesn’t necessarily mean you’re getting the best possible price on your premiums. The only way to know for sure is to shop around and compare offers.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- This 20-year-old lotto winner refused $1M in cash and chose $1,000/week for life. Now she’s getting slammed for it. Which option would you pick?
- Warren Buffett used these 8 repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Sigrid is a senior associate editor on the Moneywise team, where she has also worked as a reporter and staff writer.
Mortgages • Feb 17
First-time home buyer programs
Mortgages • Feb 15
