U.S. inflation has eased from its 2022 highs, with the Consumer Price Index (CPI) stabilizing around 2.4% at the end of 2025. While the pace of price increases has slowed, elevated costs for services, housing, and food persist, maintaining pressure on consumers (see Figure 1). Inflation is expected to remain below 3% into 2026. In a Southern Ag Today article, Kim and Yoon (2025) explained why the perception of grocery inflation remains high. Despite inflation slowing, prices rarely return to previous levels; rather, they increase at a more sustainable, yet still elevated, pace. The key to offsetting increases in consumer prices is income growth. When income does not rise in line with prices, consumers lose purchasing power. To address this and ensure that households are not caught in a financial trap, several practical strategies can be considered. I have seen the suggestions below applied in real life while growing up and continue to practice them myself.
First, it is important to track household spending each month and ensure that it does not exceed total income earned. There are simple ways to do this, such as keeping a spreadsheet of all expenses as they occur. Households can also be managed like a business to ensure that “profits” (savings) are generated. These savings can then be placed in high-interest-earning accounts. A simple 80/20 budgeting rule can be applied, where 80% of income is allocated to needs and wants (rent, food, utility bills, travel, and entertainment), with needs prioritized, and the remaining 20% allocated to savings or debt repayment, if applicable.
If living expenses consistently exceed income or you are unable to meet your savings goal, analyze spending categories such as food and discretionary expenses. This analysis can help identify areas where habits can be adjusted to seek more affordable alternatives. For example, instead of eating out at restaurants, which may include not only the cost of the meal and tax, but also tips, service charges, and/or delivery fees, consider preparing home-cooked meals. This option is not only healthier but also potentially at least three times less expensive (Bachmann, 2024). Additionally, consider brewing coffee at home instead of purchasing a $6 cup daily; this can lead to monthly savings of over $100. Cooking at home also offers social benefits, such as strengthening bonds with household members and enhancing overall family well-being.
Figure 1. Consumer Price Index, 12-month percentage change, selected categories
References:
Bachmann, Kirk. “2024 Consumer Dining Trends: How Americans are Spending on Restaurants and Takeout.” Auguste Escoffier School of Culinary Arts. September 25, 2024. Accessed: February 13, 2025. https://www.escoffier.edu/blog/world-food-drink/consumer-dining-trend-statistics/.
Kim, Ashley Jiyoon, and Sungeun Yoon. “Why Grocery Inflation Still Feels High.” Southern Ag Today 5(6.5). February 7, 2025. https://southernagtoday.org/2025/02/07/why-grocery-inflation-still-feels-high/.
Thomas, Chrystol. “Making Ends Meet When Purchasing Power Falls.“ Southern Ag Today 6(8.5). February 20, 2026. Permalink
