Ten Ways To Save Money

According to the Consumer Price Index (CPI), the average inflation rate during the two-year COVID period was about 1.4 percent. In January 2022, the CPI rose to 7.5. However, the CPI is a huge understatement. Inflation is actually much worse because the CPI does not include food, and energy costs which have soared to about 30 percent, as well tech replacement, home, fees and taxes. Painfully, it looks like inflation is here to stay for the foreseeable future.
To combat inflation, the Federal Reserve will likely raise short-term interest rates. The problem is the Federal Government is barely able to pay its interest on its short-term debt. If interest rates rise too much, it could cause solvency problems for our government. So, given this plus the war in the Ukraine, which could increase government borrowing as wars usually do, the Fed can’t raise rates much without creating a financial calamity.
Remember the stimulus money we received? We are slowly paying the government back for this “free money” through inflation. Rising prices are induced by an injection of money into the system without a matching rise in population. This causes money to devalue, thus rising prices. We are also experiencing somewhat of a breakdown in the supply change, which is triggering unavailability of some products and parts. This is also resulting in rising prices.
Ten Things You Can Do to Save Money
• Refinancing your home
• Getting zero-percent balance transfers on credit cards
• Reducing your home energy usage
• Carpooling whenever possible
• Keeping your tires properly inflated
• Shopping for better auto and homeowner insurance rates
• Eliminating unnecessary expenditures
• Using coupons when shopping for groceries
• Buying in bulk
• Better meal planning
You can make your own calculations on inflation by keeping good records. You can also get advice from your accountant or tax planner concerning what you can do to save money given your specific situation. As a reminder to our clients, we offer you complimentary tax planning advice.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information, call 661-259-1967 or visit www.protaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.