Managing inflation-sensitive expenses on a fixed income
How can I avoid the impact of inflation if I'm on fixed income?
Inflation is a concern when you are living on a fixed income, and volatile economic environments only add to the challenge. You want to receive the best value for your money and protect your fixed income, but inflation can deflate your income and rob you of the standard of living you've worked hard to achieve. Using these tips, however, you may find it easier to burst the inflation bubble.
Shop insurance carriers
If you comparison shop for your vehicle and homeowner's insurance policies you'll find rates can vary considerably between companies. You can also look into adjusting your deductable, as increasing it by $500 per incident can significantly decrease your policy premium. Review your policy to see if you are eligible to receive any multiple policy discounts, good driver discounts, or rewards for no claims. If not, shop around using comparison tools on the Internet. If you find a deal, take it back to your insurance company as they may prefer to match rather than lose you to the competition.
Review your transportation needs
Funding a vehicle that rarely gets used can make a real dent in your budget. Take into consideration how often the vehicle gets used as well as your cost for fuel, maintenance, insurance and yearly registration fees. These expenses can quickly add up to money you would rather be spending on something else.
Find discounts on food
The cost of food continues to rise in this country, so it pays to comparison shop between stores. Watch your mailbox and the Sunday paper for coupons, or better yet, visit the numerous online coupon sites that can help you save more. Not that you have to resort to the tactics that shows like Extreme Couponing use, but a little effort can save a lot on the essentials.
Research healthcare policies
Healthcare continues to be a major concern for most Americans. Review your policy to see if there are ways to make do with another type of policy. See what types of coverage you no longer need, and look to organizations that provide special group rates for being a member.
Get a fixed-rate home loan
If you are not locked into a fixed-rate home loan, now is the time. As inflation increases, so will interest rates. If you have adjustable mortgage, you will see your monthly housing payment rise so check on refinancing, if possible.
Lose the adjustable lines of credit
If inflation is rising, so will any adjustable lines of credit. If you have a variable home equity line of credit, try to refinance and secure a fixed rate. Credit cards with balances on variable lines of credit will also increase their monthly minimum due. However, your best bet will be to pay down or pay off these lines of credit.