Here are some tips to help you stretch your salary in a high inflation environment

Soaring prices are making it difficult for many Americans to pay for expenses each month. Costs are rising for almost all major expenses, from housing and food to medical care. The salaries of the employees do not follow. Having the money that comes in every month comes out just as fast is becoming more and more common.

Due to high inflation, the typical American household spent an extra $445 in September to buy the same goods and services as a year ago, according to an estimate from Moody’s Analytics.

Just under two-thirds, or 63%, of consumers were living paycheck to paycheck in September, up from 57% a year ago, according to a new survey from LendingClub and PYMNTS.com. Over the past year, wages have risen 4.9%, while inflation has jumped more than 8.2%, according to the same report.

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Many people are having to face difficult choices to avoid breaking their budget. Still, “the more wisely consumers buy, the harder it will be for companies to aggressively raise prices,” said Mark Zandi, chief economist at Moody’s Analytics.

Here are some strategies that could help you increase your salary.

• Always have a shopping list. When it comes to essentials like food, you may have already cut out restaurant meals. But eating there is also more expensive than a year ago. When to buy food or other essentials, always have a list. It forces you to plan what you are going to buy before you spend.

• Delay shopping for a day or two. Take the time to research the best deals and promotions and collect coupons before you buy. Also, waiting a few days may lead you to realize that the item you wanted was not an essential purchase.

• Cancel a monthly subscription. After setting up a monthly subscription – for cable TV or streaming services, publications, gym memberships or weight loss programs – you probably don’t think about it, but that money keeps coming out. from your bank account or is debited from your credit card. Stop that! Take a close look at all your subscriptionsthen cut out what you don’t really need.

Lodging is probably your biggest monthly expense, and you could be shelling out more than is ideal. Many financial experts recommend do not spend more than 30% on rentwhile lenders like to see you spend 28% or less of your gross monthly income on housing expenses in order to obtain a mortgage.

After almost two years of record high mortgage rates, the lending landscape has changed dramatically. The average rate on a 30-year fixed rate mortgage fell from an average of 4.14% in March to 6.92% in October, according to Bankrate. So refinancing may not be a viable option now.

• Reduce electricity consumption. Shop around to see if there are any utility providers that offer lower rates. Also, small changes can translate into big savings. Use energy efficient bulbs. Do not run the dishwasher without a full load. Do not leave the computer running. Lower the thermostat and/or install a programmable thermostat.

For owners:

• Rent a room in your house. Check state laws and with the local housing authority to understand restrictions and requirements. Homeowners associations may also have rules restricting rentals, so understand those policies as well. Contact your home insurance to make sure you can rent and what is covered.

• Try to get rid of the private mortgage insurance. If you put less than 20% when buying your house, PMI is required. Once you have 20% equity it can be removed. If home values ​​have increased in your area, you may have enough equity to meet that 20% threshold. If so, ask your lender to cancel your PMI. They must comply if you are in good standing and have not missed any mortgage payments.

For tenants:

• Consider finding a roommate.

• Negotiate for a lower rent. If you don’t ask, you won’t get it. Talk to your landlord. Be honest about your financial situation and offer a monthly payment that you can afford. Offer to do the repairs yourself for a break in rent. Extend your lease at the current rate now, if rents in your area are expected to continue to rise.

Interest rates are at record highs and climbing. According LendingTree. The rates offered on the new cards are even higher, at 22.21%, the highest since LendingTree began tracking in 2019.

• Switch to 0% balance transfer cards: Interest-free periods as long as 21 months are still available, while most offers last 12-15 months. Just be aware of the fees, which can range from 3-5% of the amount of money transferred. “If you have enough credit to get one, it’s the best weapon against credit card debt,” said Matt Schulz, chief credit analyst at Lending Tree.

• Ask your credit card issuer for a lower rate: About 70% of people said they asked for a lower interest rate on their credit card, according to an April 2022 survey by Lending Tree. The average reduction was 7 percentage points.

• Consider debt consolidation : Making a monthly payment at a lower interest rate can help you pay off your debt faster. Speak to a credit counselor at a non-profit agency for free to help you develop a debt consolidation or debt management plan. Find a counselor through the National Foundation for Credit Counseling at NFCC.org.

If you have extra money left over after paying for your essential household expenses, be sure to pay yourself. You can make that money work for you with a high interest savings account. The average rate on the highest paying online savings accounts is 2.34%, according to DepositAccounts.com, and some rates reach up to 3%. So if you have extra money, put it aside.

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