U.S. households are spending an extra $327 a month due to inflation

On Apr 13, 2022

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Inflation has hit levels not seen in 40 years and Americans’ wallets are feeling the strain.

Prices are rising on everything from energy to food to shelter, costing the average American household an additional $327 per month, according to a Moody’s Analytics analysis. That’s higher than last month’s estimate of $296 per month.

The latest figure is based on the Consumer Price Index’s 8.5% year-over-year rise in March. The index measures a basket goods and services.

Food rose 1% from last month and 8.8% over the last 12 months, while gasoline jumped 18.3% since February and 48% from last year.

However, there is some good news, according to Moody’s Analytics’ senior direct of research Ryan Sweet, who conducted the analysis.

“Our forecast is that March was the peak for year-over-year growth in inflation and that it will gradually moderate,” he wrote.

Yet it’s expected to take some time for inflation to cool off. With that in mind, here are things you can do now to try to mitigate that $327 monthly dent into your budget.

1. Do a weekly budget check

Since prices are increasing so frequently, it’s a good idea to review and reassess your budget on a weekly basis, said money expert Sahirenys Pierce, founder of personal finance blog Poised Finance Lifestyle.

“You want to be aware of where all of your money is going and give yourself the opportunity to lower another area of your budget to make the numbers work,” she said.

One way to lower your costs is to cut out things you don’t need, like subscription services. You can also try negotiating to lower bills like your cable bill or car insurance, suggests Misty Lynch, a certified financial planner with Walpole, Massachusetts-based Sound View Financial Advisors.

Save on energy by unplugging appliances when they are not in use or using power strips with switches that allow you to completely turn off the products plugged into it. By doing so you could save 5% to 10% of your residential energy use, according to the Department of Energy. Turning down the heat can also help save money.

2. Think ahead

To save on gas, be strategic about the use of your car. If you have to run errands, do them in one trip and at a time when there is not a lot of traffic, Lynch suggests.

When grocery shopping, be armed with a meal plan for the week that’s already in place.

“It does help people save money if they know what they are going to eat and stick with it,” Lynch said.

Pierce likes apps such as Flipp to look up grocery store ads. She creates a meal plan for the week that incorporates items that are on sale and prepares three of those meals on Sunday. Having a plan in place for the remaining days of the week helps her avoid picking up takeout or fast food.

“This strategy has helped my family save hundreds of dollars…