An early April survey by U.S. News & World Report reveals that more than two-thirds of Americans are experiencing financial anxiety.
Nearly 32% of respondents say the cause of their financial anxiety is the increase in prices due to inflation. Almost one in four say the main source of their stress is living paycheck to paycheck.
How Much Has Inflation Affected Your Finances?
A minority — only 11.7% — of respondents say that inflation has not impacted their overall financial health. Most Americans, and especially those who live paycheck to paycheck, are struggling. You have the same amount of money to spend, but your everyday expenses have gone way up.
Among those who say inflation has affected their financial health, here’s how they sum up the impact:
— Extreme impact: 12.4%.
— Significant impact: 27.8%.
— Moderate impact: 40.4%.
— Small impact: 19.4%.
While the cost of living is high in general, there are certainly specific areas where prices have risen the most.
[Read: Best Rewards Credit Cards.]
What’s Causing the Most Pain In Your Wallet?
Survey respondents were asked to specify where inflation was hurting them the most. While 4.6% say they aren’t feeling any effects at all from inflation, the vast majority do feel the pain from high prices.
Respondents say they’re paying higher prices in these areas the most:
— Buying groceries: 28.7%.
— Buying gas: 25.7%.
— Paying rent/mortgage: 14.2%.
— Paying utility bills: 10.8%.
— Paying health care: 6.4%.
— Buying a new/used car: 5%.
It’s difficult to deal with inflation when it’s happening to items you purchase often, such as groceries and gas. But there are some steps you can take to keep more money in your wallet.
4 Ways to Beat Inflation
Since it looks like inflation is going to stick around for a while, it’s a good idea to start fighting back. Most of us can’t snap our fingers and get a new high-paying job right away. So, if you’re in a situation where you have to make the best of things, here are some steps you can take to help your bank account survive the times.
Rework Your Budget
In the survey, 7.4% say they aren’t doing anything to adjust to higher prices. And only 31.1% say they’re reconfiguring their budget.
Revising your budget to reflect your new reality is a step you need to take today. Before you live off credit cards and get into debt, note how much more you’re paying for monthly expenses and compare it with your cash flow.
Many Americans will need to cut back on discretionary expenses to offset the price hikes. Many in our survey — 58%, which is good — reported that they had cut back on spending. This is an excellent strategy against inflation. Just be sure you update your budget to reflect that.
Use Cheaper Products or Alternatives
I have a weakness for expensive makeup. But these days, I’m seeking out freebies, so I signed up for Sephora’s rewards program. You wouldn’t believe how many free sample-sized tubes of expensive mascara I have in my possession right now!
Whatever your own budget buster is, look for cheap substitutes. This doesn’t have to last forever. Think of it as temporarily downsizing your biggest discretionary expense.
[Read: Best Cash Back Credit Cards.]
Actively Look for Discounts
It’s time to dust off your coupon skills. You really can save a lot at the grocery store, and there’s a multitude of websites that help connect consumers to the type of discounts you might be looking for.
And when it comes to gas, there are apps, such as GasBuddy, Gas Guru and even Waze, that can help you find the cheapest gas near you. It’s free and helps you save money.
Almost 40% of respondents say they’re making behavioral changes, like driving less to save money on gas. For some, though, commuting to work is a requirement, and it’s difficult to drive less. But don’t worry! There’s a solution for that, too.
[Read: Best Gas Credit Cards.]
Use Credit Cards Strategically
A little over 25% of those in the survey don’t have a rewards credit card. They’re missing out on an opportunity to save in areas that have been hit hard by inflation.
If you use a free app to help you find the cheapest gas, you can save even more by using a rewards credit card that offers cash back or reward points on gas purchases.
Likewise, if you use coupons or sales to buy the cheapest groceries, couple that with a cash back card that gives grocery rewards. By doubling up on discounts and rewards, you can maximize your savings on everyday expenses.
U.S. News has just released its list of the Best Credit Cards Awards of 2022. Due to high prices, this year’s Editors’ Choice Award focuses on helping consumers save money. The award for the Best Credit Card for Beating Inflation goes to the Blue Cash Preferred Card from American Express.
The U.S. News survey shows that Americans are feeling the effects of inflation the most when buying groceries and gas. With the Blue Cash Preferred Card, you get 6% cash back on up to $6,000 in grocery purchases and then 1% after that.
Tired of paying high prices at the pump? You’ll get 3% cash back on gas purchases. You can save big on gas if you take the time to find the cheapest gas in the area and then use the Blue Cash Preferred to pay for it.
You can find out more about the Blue Cash Preferred Card from American Express and see the list of all the winners, right here.
More from U.S. News
Survey: More Than 67% Are Experiencing Financial Anxiety originally appeared on usnews.com