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

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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.

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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

3. Shop carefully

Use coupons in-store and online. You may get them as part of a retailer’s reward program or credit card. Meanwhile, browser extensions like Rakuten and Honey automatically search for coupon codes and apply them at check out when shopping online.

4. Don’t accumulate credit card debt

5. Don’t stop saving for retirement

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

2022-04-13 09:07:21

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