Americans continue to feel the sting of inflation.
Consumer prices rose 8.3% in April from a year ago. As a result, U.S. households are spending an additional $341 a month to purchase the same goods and services compared to a year ago due to inflation above typical inflation of 2%, according to an analysis by Moody’s Analytics senior director Ryan Sweet.
“This is a little less than last month but still a noticeable burden on households,” Sweet said.
In March, the Consumer Price Index, which measures the price of goods and services, jumped 8.5% year-over-year.
While the pace of price increases moderated, it wasn’t as much as expected, Bankrate chief financial analyst Greg McBride said in a note.
“It can be tempting to say we’ve seen the peak, but we’ve also been head-faked before, as was the case last August,” he wrote.
To be sure, consumers are still feeling the pain, particularly when it comes to the cost of food, shelter, airfares and new automobiles. Energy prices, on the other hand, declined 2.7% from March — although they are still up 30.3% from April 2021.
New car prices rose 1.7% from March, while used cars and trucks saw a 0.4% decrease. Meanwhile, airline fares jumped 18.6% from a month ago and shelter costs rose 0.5%.
Food prices at the grocery store rose 0.9% from March and 9.4% from the year prior. Eggs, chicken and milk were among those hit hardest. The cost of eggs rose 10.3% from last month, while milk was up 3.1% and chicken prices increased 3.4%. Butter increased 3.7% month over month, compared with a 7.1% hike in margarine prices.
However, some prices went down month over month, as with vegetables, which decreased slightly by 0.3%; beef and veal, down 0.9%; and ham, which saw a 1.8% decline.
“It’s important to pay attention to the cost of goods, and especially on the items you need to pay consistently every month,” said Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners.
Adjust your budget
To combat higher prices and find ways to save money, first review your spending.
“With the knowledge of how much ‘more’ you’re spending comes the power of making informed decisions,” said Sun, a member of the CNBC Financial Advisor Council.
That could include whether to buy something in bulk, shopping for sales or swapping a food item for another that is less costly, she added.
Meal planning can also help you save on groceries.
Money expert Sahirenys Pierce, founder of personal finance blog Poised Finance & Lifestyle, creates a meal plan for the week that incorporates items that are on sale. She then 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 during our debt-free journey, the pandemic and now during times of high inflation,” Pierce said.
Beyond the grocery store, look at other bills, such as subscription services you may be able to live without. Consider trading off an expensive vacation for a daytrip or staycation.
You can also set it up as a monthly money challenge, Sun suggests.
“Stretch your supermarket budget, shop your pantry, drive less for one month, find creative outlets for a month that will bring joy without adding to your spend,” she said.
While saving money will help, so can finding ways to bring more money into your household.
Consider taking on temporary side gigs, such as freelancing or tutoring, or even asking your manager for more assignments for increased pay, Sun advised.
Selling items you can live without, such as toys, appliances and clothing, is another way to bring in some money. You might also rent out something you don’t use, such as an extra room, garage or even your pool (check your insurance first).
“Stretching your earning muscles can really benefit you during challenging financial times and set you up for even greater success when things get better,” Sun said.
