Finance

How to Combat Inflation in 2023

Inflation peaked at more than 9% in 2022, and we’re heading into 2023 with numbers almost as grim (7.7% over this time last year). This unprecedented increase in the cost of living is hitting our wallets at almost every transaction, but the prices of food and gas — two basic expenses we need to survive — are especially high.

So how do we fight inflation? The easy answer is to cut expenses, earn more money and make smarter short- and long-term investments. But in a tough economy with mass layoffs and surging housing costs, how can we actually do this?

32 Ways to Fight Inflation in 2023

Experts at the Federal Reserve are predicting a 3.1% drop in inflation in 2023, and Morningstar has an even brighter outlook: an average 2.6% inflation rate between 2022 and 2026, just 0.6% over the 2% target set by the Federal Reserve.

That would mean the rising prices in 2022 represent the peak of this spike, and we’re on our way down.

But just how fast inflated prices will fall is up for debate. In the meantime, American families are looking for ways to cut expenses and earn more money.

Here are 32 ways you can combat inflation until prices drop:

1. Make a Budget

The first step to cutting back expenses? Understand how much you’re spending now.

Create a monthly budget that accounts for all your necessary expenses and discretionary expenses. Then you can pinpoint specific spending areas — like grocery shopping, dining out, subscription services or utilities — that are potential candidates for cutting back.

Not sure where to start? Check out our step-by-step guide to building a budget, or download one of these top budgeting apps.

2. Pay Down Your Debt

The higher inflation gets, the harder it will be to pay off high-interest debts. As much as you can, put extra cash toward paying down debts, starting with the loan that has the highest interest rate.

If you’re struggling with multiple payment dates and interest rates, think about a balance transfer credit card or debt consolidation loan.

3. Share Resources with Neighbors

Getting to know your neighbors can be helpful and pleasant. While it’s nice to have someone to chat with over the fence, neighbors can also be a great resource in a pinch — as long as you help them when they need it, too:

  • Need a cup of flour or a couple eggs? Don’t waste the gas to go to the supermarket; your neighbor may have food to spare.
  • Want a night out? Trade babysitting services with a trusted neighbor.
  • Tackling an unusual home renovation project? Don’t buy an expensive tool if your neighbor is willing to let you borrow theirs.

4. Become a Vegan

Food prices are up nearly 11%, outpacing most other areas of rising inflation. Meat’s actually not the highest increase (about 8%), but dairy products have surpassed 15%. The solution? Embrace the vegan lifestyle.

Most of us probably can’t give up our meat and cheese completely, but by reducing the amount we consume (try out “Meatless Mondays”!), we can reduce our grocery bills.

New to vegan cooking? Try these 10 cheap vegan meals at home.

5. Save Money on Produce

High food prices go beyond meat and dairy. The average price of fruits and vegetables is currently up more than 9%.

But if the food pyramid taught us anything, it’s that fruits and vegetables are important. So how can you buy produce when inflation threatens your buying power?

  • Purchase frozen and canned produce to avoid food waste; fresh produce is great but goes bad quickly.
  • Only buy fresh produce in season when costs are lower.
A mother shops at a warehouse with her daughter.
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6. Buy in Bulk

Buying in bulk can save you money, as long as you’ll use the items before they go bad. Focus on items like meat that you can freeze, frozen foods and non-food items like diapers and paper towels.

When you buy in bulk, you’ll make fewer runs to the grocery store — a great way to cut down on fuel costs.

Pro Tip

Pay attention to the cost per unit. While bulk items have a higher price tag, you’ll usually get more product for every cent spent.

7. Cook What You Have in Your Pantry

Another way to beat inflation at grocery stores? Don’t go every week.

Your routine might include a weekly trip to the supermarket to stock up on food, but you might have enough in your fridge and pantry to last longer.

For 2023, try the Pantry Challenge once a month to see if you can cut back on grocery shopping. Just make sure you have these 11 pantry essentials before starting.

8. Meal Prep

Having a busy schedule can make it tempting to rely on the drive thru at lunch and takeout for dinner, but eating out in any form is expensive. Set aside an hour every week to prep meals for yourself using inexpensive foods you have around the house.

Don’t be intimidated if you’re not great in the kitchen. Here’s how to start meal prepping even if you’re a beginner — and don’t forget to check out our tips for meal planning on a budget.

9. Buy Generic Brands

Name brands have slick marketing campaigns and fun mascots that tempt us into buying their products. Often, store brands offer the same quality — but at a lower price. Shopping generic is one of the easiest ways to beat inflation.

Pro Tip

While store brands are usually cheaper, special campaigns may mean you’ll save money on a name brand during a promotion or sale.

10. Take Pictures of Your Receipt

Download apps like Ibotta or Fetch to earn extra cash when you shop. Though you won’t get rich off these programs, you can get a few bucks back when you shop at certain stores and submit a photo of your receipt.

11. Use Coupons

The days of coupon clipping are far from dead. Going through weekly coupons may seem tedious, but you can flip through weekly ads to find great deals while watching TV.

Pro Tip

Many grocery chains also offer digital coupons when you join their loyalty programs.

12. Skip Food Delivery

Grocery delivery is convenient — and food delivery services like Uber Eats and DoorDash are tempting when it’s cold outside — but these apps make the cost of groceries and takeout way more expensive.

Instead, find grocery stores with free curbside pickup and drive to restaurants to get your takeout order.

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13. Focus on Your Health

While food and gas are the top two areas affected by inflation, healthcare costs are also on the rise. McKinsey estimates US healthcare expenses will be $370 billion higher by 2027, due to inflation.

As it turns out, fighting inflation also means fighting off the common cold. Save money on doctor’s visits and cold medicine by eating healthy, working out, getting enough sleep and wearing a mask in crowded public places, especially if you have a weakened immune system.

14. Shop Around for Car Insurance

When’s the last time you shopped for car insurance? Chances are, there’s a better deal out there — or you might be paying for coverage you don’t need.

Take an hour to review your current coverage, calculate how much car insurance you actually need and compare prices across major insurance providers.

Pro Tip

You can usually save on car insurance if you bundle it with homeowners or renters insurance.

15. Don’t Buy a New Car Yet

Because of ongoing supply chain issues, new car prices are expected to stay high going into 2023. J.P.Morgan estimates that car prices may decrease later in 2023; put off buying a new one a little longer, if you can.

If you need a vehicle now, buy a used car. While used car prices spiked in early 2022, they’re already on a downward trend.

The Inflation Reduction Act extended the $7,500 EV tax credit for new electric vehicles. If you can afford a new EV and the at-home charging infrastructure, it could pay off in tax credits and fuel costs.

16. Sell Your Car

If you’re a two-car household, try living with just one car for a month. After a month, if you’re confident you can live with just one car, sell the other car for some quick cash — and see those savings continue with fewer registration and car maintenance costs.

Even if you discover you need two cars, cut out driving wherever you can. Carpool with coworkers, bike to work or use public transportation if you live in the city.

17. Join a Gas Rewards Program

Gas prices continue to drain the average budget as the government works to ease inflationary pressures. Joining a gas rewards program can help you save each time you pump — and may offer other perks, like price matching and in-store discounts.

Pro Tip

If you drive a lot, consider opening a gas credit card to maximize rewards.

18. Travel on a Budget

An easy way to fight inflation is to cut out “unnecessary” expenses like vacations. But hey, everybody deserves a break now and then.

If you’re traveling in 2023, research when to book flights for the best deals, especially if you’re looking for cheap holiday flights, when prices skyrocket.

International travel continues to be more expensive — and crowded, as people look to make up for lost time from COVID. Instead, plan a cheaper weekend trip just a short drive from home.

Thinking of seeing America’s greatest sites? Here’s how to visit national parks on a budget.

A mother and daughter watch television together.
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19. Cut Out Streaming Services

Netflix used to be a way for families to cut out high cable costs, but with the advent of Hulu, Disney+, Peacock, Amazon Prime, HBO Max and others, watching TV can be just as expensive as it was a decade ago.

Limit yourself to just one or two streaming services a month. You can always switch out services every few months based on when new seasons of your favorite show release.

Pro Tip

Call customer service to tell them you’re canceling to see what deals they may tempt you with. This can also work with phone and internet providers.

20. Cancel Your Gym Membership

Cutting a gym membership is an easy way to infuse more cash into your budget. Instead, use your apartment’s gym, invest in a small weight set or go for a jog outside.

21. Get a Roommate

Living by yourself has its perks, but with housing prices at an all time high, sharing the monthly rent bill is an easy way to fight inflation.

Don’t pick just any roommate, however. Here’s how to screen roommates to avoid major financial troubles.

22. Lower Your Utility Bills

Your electric, gas and water bills have probably spiked since this record-breaking inflation began. While you can’t just shut off your electricity and water, there are easy ways to lower your utility bills, like:

  • Installing LED light bulbs throughout your home.
  • Hanging curtains to trap in heat during the winter.
  • Opening windows and using fans in the summer.
  • Installing a low-flow toilet and shower head.
  • Fixing leaky sinks right away.

23. Give the Gift of Time

If you have a wide circle of friends and family, birthday gifts can add up. Talk to your loved ones about skipping gifts in 2023 and instead vowing to spend more time together.

Bonus points if you find free things to do together, and extra credit if you make money together doing a side hustle!

24. Have Fun at Home

Everyone needs to get out of the house and have fun sometimes, but maybe those $2,000 Taylor Swift concert tickets aren’t the best use of your cash.

While inflation remains high in 2023, find new ways to have fun at home for free, like:

  • Reading books from the library.
  • Doing puzzles and playing board games.
  • Starting a garden or playing lawn games, like cornhole or croquet.
  • Dusting off old video game consoles for a day of nostalgia.
A couple do a kitchen renovation.
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25. Put Off Home Renovations

Lumber, steel and labor shortages following COVID-19 have sent construction costs skyrocketing — but CBRE’s Construction Cost Index indicates that they should drop in 2023 and 2024.

If you’ve been dreaming up a renovation project since quarantine, hold out a little longer. Inflationary prices are likely to go down later in 2023.

26. Start a Side Hustle

Cutting out all the expenses we’ve talked about — from streaming services to dairy products to car insurance — is a great way to fight inflation.

But when everything costs more, we need to earn more to keep up. If you’ve got time on your hands, try out a new side hustle for extra cash.

You can make money on almost anything, from flipping furniture to taking photos to shopping for and delivering food.

27. Ask for a Raise

If you didn’t get a raise consistent with inflation in 2022, you essentially got a pay cut. Going into 2023, we’re seeing massive layoffs, especially in the tech industry, so it may be difficult to negotiate a raise, but it’s worth a shot.

Pro Tip

If an employer can’t give you a raise, negotiate for more paid time off. You can use that time to work on a side hustle — earning extra cash while still getting paid by your main gig.

28. Open a High-Yield Savings Account

Even the best high-yield savings accounts haven’t kept up with inflation. However, earning 2% to 3% APY on your emergency fund is a lot better than earning 0.01% at a traditional bank.

Plus, it’s possible the interest rate on your high-yield savings account will outpace inflation once it eventually slows down.

29. Maximize Your Tax Refund

Tax season can be a major headache, but it’s also an opportunity to get a huge influx of cash via your tax refund — a surefire way to fight inflation.

Make sure you understand how tax credits and tax deductions work to get the biggest write-offs, especially if you’re a low-income family who can take advantage of the Earned Income Tax Credit.

Pro Tip

If you made $73,000 or less in 2022, you qualify for free tax filing with guided tax preparation via the IRS.

30. Use a Cash Back Credit Card

A cash back credit card earns money every time you swipe. By using a cash back credit card for everyday purchases you’ll make regardless — like groceries and gas — you’re essentially earning a discount on everything.

If you don’t have a high enough credit score to qualify for a cash back credit card, look for an online checking account with a cash back debit card.

31. Invest in I Bonds

Investing in 2022 was extra risky — and ultimately led to major losses across the board. But one investment that makes sense right now? Series I Savings Bonds. Now through April 30, 2023, these bonds have a 6.89% interest rate.

Series I bond interest rates are a combination of a fixed rate and the inflation rate, changing every six months. These are the only inflation-protected security offered by the Treasury Department.

32. Don’t Panic About Investments

Even though the stock market looks bleak and your retirement account probably took a beating in 2022, don’t lose hope.

Most of us are investing for the long term. Over time, a diversified investment portfolio tends to pay out — and much more than bonds and high-yield savings.

FAQs

What Inflation Is Expected in 2023?

Right now, the Federal Reserve is predicting a 3.1% drop in inflation for 2023 over 2022’s historic rates. While inflation will fluctuate from month to month — and yet unknown world events can introduce unexpected inflationary pressures — it does signal that prices will begin to return to normal in 2023.

When Will Inflation Go Down?

No one can say for sure when inflation will go down, but economists at the Federal Reserve expect inflation to drop by 3.1% in 2023. Morningstar analysts predict that, from 2022 to 2026, inflation will average out to just 2.6%, meaning 2023 through 2026 should usher in the return of lower costs of goods and services.

How Can I Prepare for Inflation?

To prepare for and fight inflation, prioritize paying down debts with a high interest rate, which can get out of control as prices spike. Make a budget and find easy places to cut costs — like at the grocery store, on dining out and on streaming services. Ask for a raise at work or take on a side hustle to inject extra cash into your budget. Make smart investments, like Series I Savings Bonds, but still contribute to traditional retirement accounts if you can.

Timothy Moore covers bank accounts, loans, insurance and credit cards for The Penny Hoarder from his home base in Cincinnati. He has worked in editing and graphic design for a marketing agency, a global research firm and a major print publication. He covers a variety of other topics, including travel, taxes, budgeting, pet care and automotive. He’s worked in the field since 2012 with publications such as The Penny Hoarder, Insider, Sound Dollar, Chime, SoFi, Debt.com, Ladders, WDW Magazine and Glassdoor.


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