Here's how to build a budget as inflation rises

By Miranda Marquit

Reviewed by Kimberly Rotter

May 01, 2023

Read time: 2 min


If you’re like me, a trip to the grocery store has become a source of low-grade dread. How much will it cost this time? 

Inflation has been up for more than a year. We’re all trying to figure out how to budget. Here are some tips that might help.

How are you fighting inflation?

At Achieve, we surveyed our members to find out how they’re fighting inflation. Some people are making big sacrifices, including cutting back on what they buy every day—like groceries. I know I’ve made fewer trips to the store in favor of checking on what I already have in the pantry or freezer.

Another action people are taking to fight inflation is tweaking the household budget. With everyday expenses costing more, the old budget might not be cutting it anymore.


Here are 5 steps to building a budget during inflation

Your budget can help you stay on track with your finances even as the inflation rate rises.

1. Set your financial goals

In the past, I’ve struggled to stick to a budget. Later, I realized that one big reason was that the budget didn’t fit my goals and priorities. A budget is like a roadmap. But you need to know where you’re headed. Once I started setting short-term and long-term financial goals, it became easier to build a budget around the choices I wanted to make with my money.

2. Add up your income

Next, you need to know what’s coming in. Add up your after-tax income from all sources. This can include your day job, your side gig, support you receive, and any other money you can count on most months. 

3. Review your spending

This is where things get real. You need to be brutally honest about where the money is going. Inflation might be taking its toll, making things more expensive. But you also might be spending more than you think.  

Organize your expenses into these four categories:

  • Fixed expenses: These stay the same each month. Your mortgage or rent, car insurance, and the minimum payment on all of your loans are examples of fixed expenses.

  • Variable expenses: Look at what you normally spend on necessary items. You might spend a different amount each month on things like groceries, utilities, gas and medications. Figure out a “normal” range for this category by looking at two or three months’ worth of transactions.

  • Savings: This is money that you put toward goals like a vacation, emergency fund, or retirement. Don’t forget to pay your future self.

  • Spending: Discretionary spending on things like eating out, buying extra outfits, entertainment, and extra debt payments can all go in this category. 

4. Add up all your expenses

Now that you've categorized your expenses, it’s time to add them up. If your expenses amount to more than your monthly income, you might need to make some changes. This can include cutting back on discretionary spending or earning more money. 

The Achieve MoLO app can help you learn how much you’re spending and get an idea of what you have left for the rest of the month. Download the Achieve MoLO app to get a snapshot of money coming in and money going out each month. .

Don’t forget that you also need to make a plan for paying down debt as part of your budget.

5. Review your budget regularly

Finally, review your budget at least once a month. If you have a partner, be sure to schedule a time to sit down with them and look together. Use the Achieve MoLO app to help you review your monthly spending and compare it to your income. Tweak as needed, due to your changing situation and inflation.

Author - Miranda Marquit

Miranda Marquit is an award-winning freelance writer and podcaster who has covered various financial topics since 2006. Her work has appeared in numerous media outlets, and she is frequently asked to host workshops and appear on panels on topics related to financial wellness. She is the co-host of the Money Talks News podcast and a consumer finance advocate and spokesperson for moving hub HireAHelper.

kim rotter 2022 2

Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

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