12 inflation hacks for smart planners: Part I
Updated: Feb 26
(Source of image: Media Assets Repository System)
If you have been surprised by the rapid increase in grocery prices, you are not alone. I'm paying nearly twice as much for traditionally inexpensive items like eggs, milk, and potatoes, compared to last year.
Groceries are not the biggest contributor to my living expenses: they account for 15% whereas I spend more than half of my expenses on housing (maintenance fees and property tax). In this regard, moving to a more affordable area where living expenses and property taxes are low can greatly reduce your living expenses. But it may not be a viable option until you retire.
There is little room for negotiation when it comes to housing expenses. However, with some planning and investigation, we can stretch our dollars for groceries, utilities, insurance, cell phone, books, and more. Another way to fight inflation is by taking advantage of discounts and cashback offers. However, the best long-term solution is to generate passive income.
Although it is a good practice to reduce the overall cost of our everyday purchases, I cannot emphasize enough the importance of maintaining a long-term perspective and continuing to invest in your future during high inflation and recessions. Why? Because the economic conditions always cycle. We need to position ourselves well to take advantage of the next boom cycle following high inflation and a recession. In a blog post series that consists of two parts, I will cover these two strategies.
In Part I (this blog post), you will find the following five topics:
- Community solar projects that renters can take advantage of.
- Pay-per-mile car insurance
- The most economic cell phone plan
- Free or discounted ebooks
- Free productivity apps
Let's dive in!
(Source of image: Media Assets Repository System)
Hack #1. Go for community solar projects.
If you own a house, you can put solar panels on your rooftop to make the best use of the sunlight that is freely available. Sooner than later, your investment will start to pay off now that oil and natural gas are getting more expensive.
Even if you cannot afford to buy solar panels or are renting a place, you may be able to take advantage of renewable energy credits. One-third of the US states allow community solar projects. Similar community-led solar projects are available in other parts of the world, including Canada and Europe. In New Jersey where I live, there are two types of community solar projects. You can subscribe to one by paying a monthly fee ($5 for example) in exchange for a 10% discount on your electricity bill. However, the community solar project that I'm participating in provides a 20% discount on my electricity bill without charging me a monthly fee. So, you need to shop around until you get a good deal.
I was skeptical at first. How can they make money while providing a 20% discount? The Solar Landscape that I'm a member of takes 80% of the renewable energy credits for the solar energy they generate and returns 20% of its renewable energy credits to its members. I pay my utility provider (PSE&G) one-sixth of the total electricity charge while paying Solar Landscape 80% of the remaining five-sixths of the total electricity charge, which is qualified as solar credits. As a result, I can save 16% of my electricity bill by being a member of this community solar project. It helps me reduce my monthly expenses and makes me feel better about doing something to fight against climate change.
If you live in New Jersey in the United States, you can check out Solar Landscape that I'm happy with. When you sign up with my referral ID (800008055), you will receive a $50 Visa Gift Card as a sign-up bonus at no cost to you.
(Source of image: Metromile)
Hack #2. Revisit your insurance.
I carry auto and home insurance. They account for only 3% of my living expenses. However, in the United States, people pay $136 per month for full coverage car insurance and $149 per month for home insurance. Would not it be great if you can reduce your car insurance premium by as much as 50%?
If you live in a city and don't commute a long distance every day, you may be able to save a lot by choosing pay-per-mile car insurance. I work from home most of the time and can walk to most places of my interest, including grocery stores. Because I only drive 17 miles a month on average, I'm paying $25 a month for my car insurance. Metromile charges me $0.81 per day and 2.5 cents per mile that I drive. So, the calculation goes like this:
$0.81 per day x 30 days + 2.5 cents per mile x 17 miles = $25
I used to pay $60 a month for my car insurance with Progressive whose insurance premium does not take my driving mileage into account. Pay-per-mile car insurance is a great option to save money if you drive less than 50 miles a month or want to keep the second car that you rarely drive. Now that gas prices are soaring, I walk to a grocery store unless I have big items to carry. It is only 0.4 miles from my place, making this shopping trip a pleasant exercise while reducing my carbon footprint.
I have been happy with Metromile: it is super-easy to claim through a mobile app; they adjust your car insurance premium (once a year for me), based on your actual driving mileage. I like their full transparency and seamless, data-driven operations. If you want to find out whether Metromile is right for you, you can get an instant quote here.
Of note, Metromile is now a part of Lemonade. I have also switched my home insurance to Lemonade because Lemonade gave me a better policy at a lower premium, compared to Progressive. Once the businesses of these two companies are fully merged, I expect an additional discount from carrying both car and home insurance at Lemonade.
I don't know about you. But discussing quotes with insurance agents sometimes makes me feel like talking to a wall. I try to avoid it as much as possible. On the other hand, Maya, an artificial intelligence-powered chatbot on Lemonade, has been much more pleasant to interact with. Maya fully understands my need and goes above and beyond to meet it. It took me about 5 minutes to get a quote for my home insurance while answering Maya's questions on the website. What really impressed me was that Maya offered to contact my previous home insurance carrier to cancel my old policy so that I don't have to call them.
I understand it may sound strange that an AI chatbot can make you feel better than human agents. But, that is why I'm with Lemonade and investing in its business. You can try it out and let me know what you think. If you sign up from this link, you will receive a $10 Amazon gift card at no cost to you.
(Source of image: Google Voice)
Hack #3. Use Google Voice for WiFi calling while using Tello for cellular data and international calls.
When I was a poor academic 10 years ago, I used to pay $37 a month for basic cell phone service that came with a sluggish and lean mobile data plan. Because I rarely needed to make phone calls outside the home or my workplace, I started exploring the possibility of using free WiFi calling to replace my cellular phone service. After some digging, I learned that I could use Google Voice for WiFi calling. With access to mobile data through the cellular network, Google Voice is also available on the road. So I decided to let go of cell phone service and use my tablet for calls on the road by purchasing 2GB of mobile data at $30 a month (Verizon Wireless). This payment plan allowed me to surf the internet at high speed during my commute while enabling me to make calls on the road.
Google Voice has been working great for me. It makes it easy for me not to answer spam calls, provides transcribed voicemail, and automatically updates my contacts through Google Contacts. All for free.
Now that I'm working from home most of the time and reading ebooks on my Kindle device during waiting time on the road rather than surfing the internet, I have adopted a different phone plan from Tello. I'm paying $6 a month for 500 MB of mobile data, unlimited text, and 100 minutes of phone calls (domestic and international calls are treated equally). This plan gives me peace of mind by allowing me to make phone calls, check emails, and use Google Maps on the road while making frequent, high-quality international phone calls to my mother in South Korea enjoyable, who cannot use a computer or mobile apps.
My brother is also using Tello. If you sign up from this link (referral code P3J6B37F), you will receive a $10 credit at no cost to you.
(Source of image: Amazon)
Hack #4. Free or discounted ebooks
I used to read anything substantially long on print. Staring at a computer screen for hours strained my eyes. Because I read thousands of research papers in academia, it became burdensome to carry them around, not to mention that it was going against the collective efforts to slow down climate change.
So I decided to give it a chance to read things in a digital form. The retina display of my Macbook provides a much better resolution than the PCs I used to use, which greatly reduced my eyestrain. Taking a one-minute break every hour also helped. As I felt more confident and comfortable in reading digital documents, I became curious about ebooks. What about reading books on a Kindle device?
I thought that if reading ebooks in a Kindle reader is comparable to reading newspapers as advertised, there was no reason to avoid ebooks, given that ebooks are much cheaper than paperbacks. Since I bought my first Kindle reader five years ago, I have been reading many more books than before. Reading ebooks in a Kindle reader is easy in my eyes, much better than reading things on a computer or tablet screen. Because a Kindle reader can hold thousands of books, I can carry them anywhere, making it convenient to read ebooks whenever I have more than 5 minutes of free time.
What really sold me on a Kindle reader is that it enables me to archive the ebook texts that I highlight on the Amazon cloud. I can easily copy those texts on my note app (e.g. Google Keep; see the next hack #5 below) and use them as an anchor to contemplate or generate ideas about what to write.
Because you would need to purchase a Kindle reader, there is an upfront cost for reading ebooks comfortably. However, I recouped this cost soon and saved money with ebooks. To show you how it works, I can tell you what I did. I own 55 ebooks. You can buy a paperback at $17 on average and a popular ebook at $10 on sale.
Here is what I do to catch discount deals for the books that I want to buy: I keep a list of books to buy as a "Book" list on Amazon. I visit this list once in a while to see which books are on sale. You can sort your list, based on the price of a book (although it does not always work perfectly), which makes it easy to notice which books are on a deep discount. Amazon frequently runs promotional sales for Kindle books that are not related to personal finance and have entered a phase of stagnant sales. If you are patient enough, you can get great discount deals on Amazon, including free or $0.99 ebooks during promotions. Amazon can still make profits this way, given that Amazon may make more money by selling these ebooks to millions of people on the globe at a negligible additional cost.
My average cost per ebook comes out to be $4. Since I paid $160 for a Kindle reader (you can buy a Kindle Paperwhite at $100 now) and its cover, the calculation for the amount of money I have saved with ebooks goes like this:
($17-$4) x 55 - $160 = $555
If you are an avid reader, you will get much bigger savings over time. Another source of saving money on ebooks is free pdf books available at Project Gutenberg and Internet Archive. They provide many copyright-free ebooks on these websites. You will not find the latest ebooks here, but I had great success in downloading old classics in pdf documents. One of my favorite ebooks that I got from the Internet Archive is "How to stop worrying and start living" written by Dale Carnegie.
Here comes the beauty of a Kindle reader. You can convert a pdf document into a Kindle format and read it on a Kindle reader by emailing the pdf document with a subject line that says "convert" to a Kindle email address that is unique to every Kindle device. I love this feature so much that I often send pdf documents to my Kindle reader to enjoy comfortable reading.
In summary, I highly recommend ebooks for their lower costs, portability, searchability, archivability of your book notes, and space-friendly feature. Imagine that you will no longer need a room full of bookshelves and that you can get a lot more out of thousands of books at your fingertips!
(Figure 1. Source of image: Google)
Hack #5. Free productivity apps (Google Keep, Grammarly, Todoist, Toggle)
There are many free apps out there. So it may not occur to you that free productivity apps can help you fight high inflation. But I want to introduce you to four powerful apps that help you learn about new topics, inspire you to come up with new ideas, improve your writing, and keep track of long-term projects, short-term things to do, and how much time you are spending on each task.
Thanks to these productivity apps, I developed the following routines that empower me every day: deep breathing combined with meditation, reading books, keeping notes on what I have learned, writing blog posts and books, and meeting/webinar notes for work. Given that incremental daily improvement encourages us to move forward and makes us feel happy as a result, these apps definitely increased my happiness by helping me grow. Because I became more knowledgeable in investing and marketing while using these apps to pursue my personal goals, I was able to make a transition to a more profitable job as well. In this regard, you can think of these apps as a great long-term investment that will grow your income by boosting your competence.
Let's start with a note-taking app, Google Keep. I have used several note-taking apps: OneNote, Gnotes, and Evernote. By far, Google Keep is my favorite for its simplicity, availability of its desktop version, and rich functionality. All for free. I used to use OneNote heavily, but I have been limiting its use as a pdf document holder since Microsoft reduced the size of free personal cloud storage to 5 GB. Gnotes is also easy to use, but its desktop version is no longer available.
(Figure 2. Source of image: Author's Google Keep notes)
Why do I love Google Keep?
Everything is intuitive. You can search your notes with keywords. Not only can I organize my notes into folders, but I can also make important notes stand out visually. When you no longer need to look up certain notes, you can safely archive them. You can background-code your notes according to their importance and nature (e.g. principles, notes looked up often, urgent tasks). You can easily associate labels (subject folders), images, and links with each note, too (see examples in Figure 2 above).
Google Keep has other useful features. You can create a checklist that I use quite often to manage groceries and other inventories. These lists can be shared with others in real-time (see examples in Figure 1 above). You can also create audio notes and set up reminders for each note. Google Keep notes can be copied into a Google Doc (Is not it wonderful that I don't have to purchase Microsoft 365 subscription thanks to Google Docs, Google Sheets, and Google Slides?).
As you can see, I'm a happy resident of the Google ecosystem, which also makes it logical for me to invest in its business as a shareholder (for more details on this type of investing philosophy, you can read this).
(Source of image: Grammarly)
Who proofreads your documents and provides you feedback? Grammarly is my favorite writing assistant powered by artificial intelligence. Since I installed it in my Chrome browser, Grammarly has been going over all of my writing materials in real-time. The free version checks typos and grammar. It gives you suggestions for clarity and conciseness while letting you know whether your document has the right tone for your target audience. Scholars can easily obtain citations for the research articles they are reading online with a simple click. Grammarly gives me peace of mind, knowing that the final versions of my documents are free of typos and grammatical errors. When I receive points higher than 90 after running by Grammarly, I know that the document is in a good shape. I highly recommend Grammarly to everyone, especially those whose native language is not English.
(Source of image: Todoist in Microsoft app store)
Are you struggling with building good habits or getting things done in time? If you are nodding, give Todoist a try. I have been using it for several years. Todoist changed my life for the better, helping me create new habits and focus on high-priority tasks.
Todoist is a task manager app that generates a daily to-do list from your projects. It has a simple platform and is easy to use despite its powerful features: recurring due dates, priority ranks, and tasks organized in a hierarchy.
What is Todoist's superpower? A gamified reward system. When you check each task off your to-do list after completing it, you get a Todoist Karma point. As you accumulate more points, you will advance through eight different Karma levels from "beginner" to "enlightened". I'm a Grand Master and two-thirds of my way to becoming enlightened.
These Karma points don't have a monetary value. But they motivate you to complete the tasks on your to-do list because you can see the progress you are making in your Karma journey. If you are competitive, you will love Todoist. Who would have thought that it can be fun to use a productivity app?
(Source of image: Toggle in Google Play)
Toggle is a time tracker that you can use to learn how long it takes to complete each task of your interest. Before using Toggle, I never knew the importance of timing tasks. Now that I have been using Toggle for years, I can tell you how you can benefit from Toggle: first, you can plan your day better, knowing how long it takes to perform each task; second, you can use the data as feedback to get faster in performing each task.
Similar to playing a game, the mere act of timing a task helps you focus on the task. When you complete it sooner than before, you get a dopamine rush. Taking advantage of this, I use Toggle to improve my performance for difficult tasks.
Here is my first example. When I was struggling with going over a science manuscript fast enough to make the first editorial decision in 30 minutes, I started tracking the time it took me to complete this task. In six months, I could shorten this time from two hours to 30 minutes on average by triaging the manuscripts that don't meet the editorial bar in 15 minutes and quickly identifying key information that I needed to recommend peer review for the manuscripts that I could consider for publication. This level of progress blew my mind while making my manager happy!
Toggle brought me another breakthrough for my freelance job. In my spare time, I translate science manuscripts written in Korean to English. Since I get paid $25 per 1000 Korean characters, the faster I can translate the original text, the more money I can make while putting the same amount of time to work. In my early days, I made $15 per hour. With continuous optimization of my workflow, now I'm making $30 - $40 per hour.
Use Toggle or any other time tracker to improve your productivity. You will be amazed by how much you can achieve.
(Figure 3. Source of image: Fidelity)
Inflation decreases the purchasing power of money. But you can lessen its blow to your finance by looking out for ways to reduce your expenses and create more income. To do this well, you need to know where your money comes and goes in detail. I recommend that you keep track of your money for at least a year. Once you understand your finance, it will be much easier to come up with plans to improve it.
You may be concerned about the current bear market and an upcoming recession. So am I. When it keeps you up at night, remember that bear markets last much shorter than bull markets (see Figure 3 above). A recession is an inevitable part of an economic cycle. It means that we will come out of it stronger at some point.
If you have a long investing time horizon (at least 5 years), recessions can provide you great opportunities to build your wealth faster by buying high-quality assets on fire sale. I am dollar-cost-averaging by using my 401 contributions to purchase more shares of an S&P 500 index fund every two weeks. This is the easiest way that I can think of to stay invested without attempting to time the bottom of the stock market.
I hope that this blog post has inspired you to try new ways to fight against inflation. In Part II of this blog post series, I will cover more tips to reduce healthcare expenses and come up with extra cash via smart shopping, sustainable meal planning, freelancing, and healthy lifestyles.
Which tips covered in this post are you planning to use first? Do you have other suggestions to share? Leave your comments below to continue our conversation.
Stay curious and optimistic!