In recent times, personal finance challenges have been particularly difficult. High inflation has led to skyrocketing prices for essential items such as eggs, gas, homes, cars, and apartment rentals. Additionally, over 40 million federal student loan borrowers are preparing to resume payments after a three-and-a-half-year pause, adding even more pressure.
Although the inflation rate for 2023 is lower than last year’s peak of 9.1%, it remains high at around 3%, one of the highest in the past decade. Prices for various items, including housing and household essentials, continue to remain high compared to previous years.
As the federal student loan payment pause implemented in March 2020 is set to expire next month, millions of borrowers will now have to budget for an expense they haven’t had to worry about for a long time.
Overcoming these challenges requires careful planning, discipline, and creativity. Here are five ways Americans are finding solutions to the issues of inflation and the return of student loan payments.
1. Gas Apps: Gasoline prices have slightly eased recently, but they are still higher than a year ago. Gas apps like GasBuddy, Gas Guru, and Fuelio can help individuals track down the best prices in their area and earn rewards to lower their fuel expenses.
2. Deal Groups: Many people are joining deal groups, often found on social media platforms like Facebook, to find discounted items for sale. These groups offer thousands of daily discounts and sometimes even free items.
3. Autopay: Those with student loans who are preparing to resume payments should consider signing up for autopay services. Many lenders and loan servicers offer a 0.25% interest rate deduction for borrowers who enroll in autopay. While seemingly small, this deduction can accumulate into significant savings over time.
4. Bulk Purchases: Taking advantage of discounted prices is a key strategy for saving money. When items you regularly use are deeply discounted, consider buying them in bulk. This is particularly effective for non-perishable foods, toiletries, cleaning products, and long-lasting medicines.
5. Paying Extra on Debts: With the student loan payment pause, some borrowers may have saved the money they would have paid into interest-bearing savings accounts. As payments resume, it may be beneficial to use those savings to make extra payments and pay off loans faster. Contacting loan servicers to request principal-only payments ensures that additional funds go towards reducing the outstanding balance.
By implementing these strategies, individuals can alleviate the financial burden caused by inflation and student loan payments.