Tips to cut costs as inflation reaches 7%, fastest pace in decades

The consumer price index rose 7% in December from a year earlier. That's the fastest pace in nearly 40 years.

BACKGROUND: Inflation surges in December to highest rate since 1982

Inflation is driving up the cost of just about everything a family needs. The U.S. Bureau of Labor Statistics says over the year, food is up 6%, shelter is 4% higher, used vehicles are up 37%, and gas is up 49.6%.

"I think it’s important people not get into a scarcity mindset," said personal finance expert Bobbi Rebell with Tally. "The truth is inflation is very real thing. It isn't something you can control."


Rebell says despite higher costs, you should still pay your self first.

"This is not the time to lower your 401k contributions, for example," she said. "This is not the time to forgo building up your emergency fund.  If anything, it’s more important than ever that we keep up."

Then decide what’s a 'need' and what’s a 'want.'

"Just because we’re postponing them, doesn’t mean its forever," she said.  

Rebell suggests paying down debts so that you have fewer payments and more cash for groceries, gas, or rent.

"You can get those costs down and leave more room for things you can’t control," she added.

When shopping, use shopping extension browsers and look for coupon codes to make sure you're getting the lowest prices. And she has this tip:

"I look at what is the policy for price adjustments," said Rebell. "Sometimes they have something where if you buy it within 7 days, and the price goes down, you can call them. You don’t even have to go into the store, and you can get the price adjusted."


With prices up at the grocery store, such as meat prices being up 16%, she says you can buy less of more expensive items, open a recipe book, and buy cheaper alternatives.

"Even last week, I made my family, for the first time ever, a three bean chili," Rebell noted. "And you know what? They liked it. I thought I was going to get so much pushback because it wasn’t a steak or a hamburger meal. I have three guys, my husband and two sons. They were into it.  They liked the three bean chili." 


In recent grocery price studies by FOX 26 analyst Robert Ohmes for Bank of American, the lowest overall grocery prices were found at Joe V's, Fiesta Mart, Aldi, and Walmart.

You can also use cash back apps, such as Ibotta, where you upload your grocery receipt and earn cash back.  Other apps, such as Basket and Flipp, can help you find the lowest prices for items on your shopping list.