Here’s What to Do if You’re Still Struggling Financially Even as Inflation Is Getting Better

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Having trouble making ends meet? Here’s your game plan to cope with personal finance problems not much improved by lower inflation. [[{“value”:”

Inflation has been wreaking havoc on Americans’ personal finances for several years now. But thankfully, it’s gotten better more recently.

In June of 2022, annual inflation was measured at 9.1%, as per that month’s Consumer Price Index (an index that tracks changes in the cost of consumer goods and services). By contrast, this past January, the CPI measured annual inflation at just 3.1%. That’s clearly a big improvement.

But just because inflation has cooled doesn’t mean that you’re in great financial shape. It may be that you’re still struggling to pay your bills or sock away any money in your savings account. If that’s the case, here are a couple of steps worth taking.

1. Reassess — and try to slash — your largest recurring expense

Cutting back on spending is a good way to improve your financial picture — that’s pretty obvious. But if you’re living paycheck to paycheck or are grappling with debt, then let’s face it — canceling a streaming service and ordering one fewer takeout meal per month may not do a whole lot of good for your situation.

It’s true that when you’re trying to save money for the future or dig out of debt, every dollar does count. But if you’re in a pretty bad spot, then you may need to implement a more drastic spending change to see your financial picture improve.

That’s why it’s a good idea to reevaluate your largest monthly expense and see if there’s a way to reduce it. For many people, that’s housing.

Now if you own a home, you probably aren’t going to just up and sell that property and move somewhere cheaper. Selling a home can take time. And right now, even if you were to downsize, you might get stuck with an expensive mortgage due to elevated interest rates that negate your savings.

So in that case, a better bet may be to try to offset your housing costs by renting out a room in your home, if that’s possible. Or, you could look at renting out a parking spot in your driveway if you live in an area where it’s tough to find a place to put your car for the day or overnight.

If you’re not a homeowner, you may have more options. If your lease is ending soon, see about a less expensive rental. Or, look at getting a roommate.

Another option? Negotiate your rent with your landlord if you’re struggling to pay it. Your landlord may agree to shave, say, $100 off your rent if it means keeping you as a tenant and not having to go out and find someone to replace you, all the while risking an extended vacancy.

You may also be able to negotiate reduced rent in exchange for certain maintenance tasks. For example, if you rent a detached house, your landlord might agree to a rent reduction if you maintain the lawn all spring and summer.

2. Join the gig economy

Boosting your income with a second job could improve your finances to a large extent. But you’ll need to find the right gig.

To that end, first set an income goal. Would an extra $300 a month be your ticket to building some savings or paying off your credit cards by the end of the year? Come up with an earnings target, as that will help you determine which gigs are a good fit for you and which aren’t.

Next, think about your schedule. Is it open enough that you can commit to preset working hours? Or do you need a second job you can do completely at your own pace?

Once you’ve tackled these two items, you may be in a better position to assess your options. And from there, one thing you may want to do is try out a few different gigs initially to see which works best for you.

If you’re trying to make a significant improvement to your finances, your side gig may be something you do for the rest of the year — or even beyond. So it’s important to find a job that’s a good fit.

Inflation isn’t as rampant as it was a couple of years ago. But that doesn’t mean people aren’t struggling to pay the bills these days. And if that’s the boat you’re in, it may be time to try to slash your housing costs (or whatever your largest monthly expense is) and embrace the gig economy.

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