5 Money-Smart Tips to Save More When You Spend

Today we're serving up a good-news/bad-news sandwich for you to munch on while you sip your Weekend Tea.

The good news? Inflation isn't just slowing—it has been for months. The ongoing rise in a wealth of consumer prices has moderated to a percent or so higher than the pre-COVID norm.

The bad news? Consumer prices are still high. Whether it's fast food, rent, or auto insurance, Americans are still feeling the pain from a few years of accelerated inflation—even if price growth has been tamed somewhat of late.

We'll be blunt: There's no easy, magical solution to this problem. The only way for prices to actually come down is deflation, which could only really happen if the economy took a big turn for the worse—and the resulting price relief, while nice for some, wouldn't matter to the millions of Americans who would almost necessarily lose their jobs in such an environment (employment decreases during recessions).

That said, you're not powerless against the endless march of rising consumer prices. Today, we'll talk to you about a few ways you can push back on price creep and keep your expenses contained.

The Tea

Like we just mentioned, inflation has been slowing … for longer than you might have realized. 

Consider the most recent reading of the Consumer Price Index (CPI), a measurement of various American consumer prices: In April, inflation remained level at about a 3.4% year-over-year (YoY) increase, while month-over-month inflation was slightly cooler than expected. The YoY reading has been stuck just above 3% for months—drastically lower than June 2022 highs when inflation soared above 9%!

That sounds great, and it largely is, but …

For one, CPI is made up of several categories—and those categories' prices haven't moved in lockstep. Growth in shelter prices, for instance, peaked later than the broader CPI; currently, rents and mortgages are moving higher much more quickly than other consumer goods.

Also, slowing inflation, while helpful, doesn't mean that prices are going lower—it just means that prices aren't expanding as fast as they previously were. Consumers are still feeling the deep pain caused by outsized jumps in cost suffered during 2021 and 2022.

It's not all dour news, by the way. Consumer prices might have skyrocketed over the past few years, but wages have too. Indeed, many Americans are actually coming out ahead compared to where they were pre-COVID.

"Prices have increased 20% since the fourth quarter of 2019, while wages for a typical worker have grown 23%," says the Center for American Progress, an independent, nonpartisan policy institute. "In fact, real wages for a typical worker stand at about the level expected if there had been no pandemic or recession in early 2020 and if they had kept growing at the same rate as in years prior."

But these are all averages. Some Americans might be ahead. But others haven't seen wages climb nearly so fast—if at all. And for those Americans, inflation is forcing them to make some difficult budgetary decisions.

Whatever your financial situation, though, if you want to take some of the pressure off your wallet, we have a few tips on how to be a smarter, savvier spender—tips that will help you get more value out of your purchases, spend less where it doesn't make sense, and avoid pricing strategies designed to squeeze every last penny from your pockets.

The Take

To put it simply, if you want to get what you need for less, you need to think more.

Your savings won't always be as straightforward as, say, using a coupon. But by spending a little more time making careful considerations about where your money is going, you'll not only end up spending less—you'll also maximize the purchasing power you have.

1. Understand When Spending Now Means Saving Later

One of the biggest mistakes cash-strapped consumers make is avoiding certain big-ticket purchases to save money in the short term, even if it means costing you much more money in the long term.

For instance, if you delay getting necessary dental work done because you're put off by the price tag, you might end up requiring even more urgent and expensive dental work down the line. (It costs a lot less to fill a cavity than to get a root canal!)

Sometimes, your finances might leave you with no choice. But where you do have a little flexibility, it helps to know when foregoing a purchase now could cost you dearly later.

2. Get Better at Price Comparing

Price comparing is a simple concept: Take two similar products and see which one costs less.

But there's a lot more to it.

For one, packaging isn't always the same—one brand might use 16-ounce packaging, while another might use a 14-ounce bag. That requires more difficult math on your part. There could very well be differences in quality, too, and what's the point in saving if you hate what you're buying?

But the biggest difficulty most consumers have is staying vigilant. 

Prices aren't static—they change all the time. But more importantly: Products change, too! Maybe the price of an item you buy every week has remained the same for years … but did you look at the packaging each and every week? Did you see a new cereal mascot, but fail to notice that your 11-ounce box of cereal has been whittled down to 10 ounces? That's shrinkflation—and it's a popular way for companies to make you pay more without ever noticing it.

In short: Never stop price-comparing, and make sure you're examining not just the cost, but the product itself.

3. Know When (And When Not) to Buy in Bulk

Buying in bulk is a popular way to save. With many items, packaging makes up an outsized amount of the cost of production; buying in bulk reduces necessary packaging, which helps reduce the price per unit.

However, bulk purchases aren't a silver bullet—in fact, sometimes, you can waste even more money by buying big.

Consider groceries with a short shelf life. If you buy 10 pounds of oranges at a cheaper per-pound price than buying 5 pounds, but half of those oranges go bad before you can eat them, you haven't saved anything—in fact, you've spent more money than you needed to, just to get a "deal."

Shelf life isn't the only reason to avoid some bulk buys; check out the numerous other factors behind which bulk purchases you should make (and which ones you should avoid).

4. Avoid Junk Fees Where You Can

Junk fees come in many forms, and go by many names—convenience fees, overdraft fees, credit card surcharges, and many more. And these annoying fees, which often go ignored, can raise the price of a product or service considerably.

But in many situations, you can reduce or even dodge these fees outright.

For instance, some banks still charge overdraft fees—but other banks offer ways to avoid them. Or if you're purchasing a concert or sports ticket, consider pricing that ticket at several vendors to see who can get you to the final purchase price with the fewest fees.

Take some time to learn about the most popular junk fees, as well as how to slip past them.

5. Be Aware of Drip Pricing

You could consider drip pricing as a brother of junk fees.

In this deceptive practice, the price you originally see is only a fraction of the overall price you'll end up paying if you go through with the transaction. The vendor starts out with a low price to get your attention. But drop by drop, more charges, fees, and options are added … and before you know it, your cart has doubled or even tripled in cost. Are you upset? Sure. But you already put so much time into getting to this point that you end up biting the bullet and buying anyway.

It's a pernicious tactic—one that makes price-comparing much more challenging and can trick people into making budget-unfriendly decisions.

Simply knowing that an industry commonly uses drip pricing can better help you prepare for the buying experience. And in some cases, you might be able to avoid some of the fees that get dropped onto your head. For instance, a hotel loyalty program member might get to skip "resort fees," or you might have certain fees waived when purchasing with a specific processor's credit card.

But most importantly: Hang in there. Even if comparison shopping is difficult when drip pricing is involved, sticking to it can save you oodles of cash.

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We know, we know—the weekend is a horrible time to tell people to think a little more. But hopefully, putting these tips to work will help you keep more of your hard-earned money.

That's all we're dishing out right now, but we'll have more treats for you next weekend.

Hannah, Riley & Kyle

WealthUp (Young and the Invested is now WealthUp)

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