How to Save Money As Consumer Prices Keep Rising
CR survey shows inflation hitting many Americans, so here are tips to cut costs
Consumers are feeling the sting of inflation in almost everything they do.
A new nationally representative survey conducted by Consumer Reports (PDF) in July of over 2,000 U.S. adults found that about three-quarters of Americans say they have experienced higher than expected prices in the past three months. Of those who told us they saw inflated prices on products, almost all (94 percent) say they noticed this on everyday items such as food and gasoline, and for more than half (54 percent), on big ticket purchases like appliances and electronics.
And inflation shows little sign of abating. The government’s latest consumer price index, released Wednesday, shows that prices rose an average 5.4 percent in July from a year earlier, equaling the June increase and maintaining the highest inflation rate in 13 years.
That compares with an average inflation rate of just 1.4 percent last year, when the COVID-19 pandemic kept most people at home.
The higher prices are largely driven by surging demand and COVID-related bottlenecks in the supply chain as companies scramble to ramp up supply and hire workers.
For shoppers, these bigger price tags will require more planning, and perhaps a budget overhaul.
“As we shift out of COVID times, you’ll need to build a savings buffer, so you won’t get sticker shock when the bills come in,” says Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York City.
Here’s what to look for in several key spending categories, with tips for reining in your costs.
Food prices surged an average 3.4 percent last month, the CPI data show, with every major category but fruits and vegetables showing increases.
As drivers know, retail gasoline prices have soared. The latest CPI report shows that they’ve jumped almost 42 percent in the past year.
Prices are spiking as a result of surging demand, as more people have resumed driving, complicated by supply chain bottlenecks, says Patrick De Haan, head of petroleum analysis at GasBuddy, a website and smartphone app that helps drivers find the best deals.
Though oil companies have stepped up gasoline production, prices are likely to stay higher as the economy continues to grow, De Haan says.
If you’re planning a summer road trip, try to fill up in states with lower gas taxes.
“If you check gas prices ahead of time to find lower-cost options, you could save $5 to $10 a tank,” De Haan says.
You can also squeeze more mileage out of your tank of gas by driving evenly, sticking to speed limits, and removing your roof rack, which can create drag.
The production and supply chain slowdowns during the pandemic have led to a major appliance shortage, which could last until the end of the year. That leaves consumers facing higher prices and long waits for many types of appliances, including washing machines, refrigerators, and freezers.
Although prices will eventually stabilize as the pandemic eases and supply returns, you aren’t likely to see big discounts anytime soon, says Nish Suvarnakar, senior market analyst at Consumer Reports.
Before you shop, make sure you figure out which appliance features you must have vs. those that are less essential, Suvarnakar says. For example, consider opting for basic stainless steel—a popular finish that is widely available—rather than a specialty finish.
If you’re looking for a new appliance now, be sure to comparison shop at independent retailers—which may offer comparable bargains and perhaps better service—not just at big-box stores. And consider substitutions if your first-choice model is unavailable.
Telecom and Internet Services
During the pandemic, telecom consumers had a bit of a break, with prices for telephone and wireless services rising only slightly, while some providers suspended data caps and provided other consumer breaks during the pandemic.
But more recently, providers have started to raise prices and impose data caps once again.
To keep a lid on those costs, consider switching to a lower-cost cell-phone plan, perhaps one from your internet provider. (And consider joining CR’s Let’s Broadband Together initiative to investigate the state of internet availability and affordability.)
Low-income families may qualify for discounts on internet service and equipment through the federal Emergency Broadband Benefit program.
And although prices are also rising for streaming services, you can still trim your costs by cutting the cable-TV cord.
Prices for new cars and trucks rose 6.4 percent in July, driven by pandemic-related factory shutdowns, as well as a shortage of computer chips. Used-vehicle prices are up a whopping 42 percent.
That doesn’t mean you can’t find an affordable option, because prices of individual models vary widely. Take a look at our article “How to Buy a Car in Today’s Challenging Market.”
Overall, as Consumer Reports’ analysis shows, there is potential for 10 percent or more off some good vehicles if you negotiate.
Keep in mind, you may get more than you think on the value of your trade-in model, says Jeff Bartlett, deputy cars editor at Consumer Reports.
“The new-car shortage is pushing more drivers to buy used cars, which means trade-in values are up,” Bartlett says.
Consumers have enjoyed a break on TV prices in recent months, with costs staying relatively flat, according to the latest inflation data. Some models are even expected to fall in price this year.
Still, if you don’t need a new TV right away, it may be worth waiting a few months to shop.
“The best time to buy TVs tends to be between fall and early winter because of holiday sales and the release of new models in January,” says Samantha Gordon, deals editor at Consumer Reports.
Consumer Reports members can find more details about the best time to buy TVs, as well as a broad array of products, by using CR’s Best Time to Buy guide.
There are plenty of other ways to save money, and Consumer Reports can help.
For instance, we’ve found that some laundry products—washers, dryers, and detergents—waste money. So here are some tips to avoid them.
We also have Our Favorite Deals Right Now, listing sales on products we recommend. And we have a monthly column on products that are on deep discount.
In July, for instance, you can find sales in 15 product categories, including gas grills, and kitchen and laundry appliances.
Editor’s Note: This article has been updated with the latest inflation numbers and to remove outdated references.