ad collaborative post // If you’ve paid attention to grocery, gas and housing prices in the last few months, you know that they’re increasing — quickly. The cost of living in the U.S. is rapidly rising, making it challenging for Americans to pay their rent, pay bills on time and budget properly.
The Cost of Living in 2023
The cost of living increased faster in 2022 than it has in decades. According to BankRate, the Social Security cost-of-living adjustment (COLA) was 5.9%, the highest jump in 40 years, due to the rising cost of living.
Unfortunately, many of the basic necessities you need daily, such as gasoline for your car or food for your family, are becoming more expensive. In June 2022, the price of gas jumped, leading to increases in transportation costs and inflation.
How can you deal with the rising cost of living as you enter the new year?
1. Update Your Budget
One of the first steps is to update your current budget. Determine how much income you have to spend every month, whether you’re paid weekly or bi-weekly.
Write down your recurring expenses, such as rent, utilities, car payments and any other fixed costs. Then write down additional expenses, like groceries, gas and entertainment or luxuries. Be sure to account for any unplanned expenses, such as car repairs or medical bills. Once you know how much money you’re bringing in and must paying out, you can make better spending decisions.
2. Cut Back on Unnecessary Expenses
Since the cost of living is rising, now is the time to cut back on truly unnecessary expenses. For example, ordering takeout food, purchasing new clothes or shoes or going on vacation might not fit your budget anymore.
While these things are nice to have, consider cutting back on them to save more money each time you get paid. Learn how to build up your savings using the 50/30/20 budgeting rule.
3. Explore Potential Side Hustles
One way to make more income while the cost of living increases is to pick up a side gig. For just a few hours a week, you can increase your income significantly by choosing a side hustle you’re passionate about.
For example, you can:
- Sell products online
- Tutor students
- Become an online coach
- Offer freelance ghost-writing services
The opportunities for side hustles are seemingly endless, so consider launching your side hustle as your expenses increase.
4. Consider Relocating
The cost of living may be rising in most places, but it’s still fairly inexpensive to live in some areas of the world. For example, cities are often more expensive than other places. Whether you live on your own, with a partner or with your family, you could consider relocating.
While relocating is initially quite expensive, it could help you save a lot of money in the long run. Try searching for new places to live, remote jobs to apply for or affordable rental spaces in a new location.
5. Use Coupons or Discounts
It’s always a good idea to use coupons, promo codes or discounts whenever possible, whether you’re at the grocery store or shopping online for essentials.
Honey is a useful app many people use to find codes and discounts. Consider downloading Honey to your browser so you can save more money.
Focus on Saving and Cut Back Spending
As the cost of living continues to rise, you might need to implement a few of the lifestyle changes above. With the economy performing weakly and a potential recession on the horizon, consider cutting back on unnecessary spending, using coupons and more to keep your savings account healthy.