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Keeping up with the cost of living

Life’s basic necessities — food, shelter, and clothing — are getting more expensive. Many experience sticker shock when it comes to food prices.

A weekly trip to the supermarket can set you back about $270 for a family of two and about $331 for families with children. That’s more than $1,000 per month.1

And high housing costs — whether you own or rent your home — is rubbing salt in the wound.

While inflation accounts for the gradual increase in prices for goods and services, cost of living is more like a snapshot of the current prices. And it’s usually calculated by averaging the costs of goods and services that are needed to meet the standard of living in a specific area.2

Cost of Living is on the Rise

Americans are spending more money to maintain the same standard of living. And it’s a lot more. These days the average household spends nearly $11,500 more annually to maintain the same living standards as they had in January 2021, before inflation creeped up to record 40-year-highs.3

Wages and Social Security

Most employees (67 percent) say their salary and wages aren’t keeping up with cost-of-living price increases.4 However, hope is on the horizon with inflation trending downward and projected salary increases of 4.6 percent. Salary increases might eventually outpace inflation.5

Retirees are getting a bump in pay — but not a big one. Social Security and Supplemental Security Income’s (SSI’s) cost-of-living adjustments (COLAs) aim to keep pace with inflation.6 In 2023, Americans received an 8.7% bump, when inflation was at its peak. However, in 2024, SSI increased only 3.2 percent for 71 million Americans. That’s an average increase of $49 per benefit check.7

Luckily, there are things you can do to keep up with the high cost of living. First, track your spending and set a budget. One thing to do is review your credit or debit card statements to see how much you’re spending on the necessities as well as the extras, some of which may have become recurring expenses that you don’t need or enjoy anymore.

Some possibilities on the chopping block: Subscription streaming services (do you really need three?) and that seldom-used gym membership (alfresco workouts in the warmer months sound refreshing).

Once you get a good grasp on your spending habits, move forward with these tips that’ll help you cut expenses and stretch your dollars.

Create a Food Budget

Groceries and eating out is expensive. According to a recent survey, 53 percent of Americans have reduced the amount they spend on groceries and 47 percent are going to restaurants less.8

Here are some ideas if you want to jump on the frugal foodie bandwagon:

It’s a good rule of thumb to keep your produce and pantry well organized so that food doesn’t expire. Look through your fridge and cupboards before you head to the grocery store — that way you won’t double up on items you already have.

When you get to the grocery store, buy private label brands and use loyalty card points. In store aisles, look for the cheapest options above or below eye level, where the priciest options tend to be. Buy your spices or dried beans in bulk. And compare prices of things per ounce, not unit price. And, most importantly, create a meal plan with set ingredients and don’t deviate from your shopping list.

Evaluate Utilities Costs

Utilities are expensive, averaging $429.33 a month, about 10 percent of people’s monthly income. Electric, natural gas, water, sewer, trash, cable TV, internet, phone, security and recycling are the utilities that keep your home running like a finely tuned machine.9

There are simple things you can do to lower your costs including turn down the thermostat, reduce water use, and turn off the lights.

Surprisingly, 10 percent of energy use comes from vampire devices, gadgets that still use energy even on standby. This can be an average expense of $100 - $200 per household, so unplug them when you’re not using them.10

Plug drafts around doors, windows, and floorboards, making it easier for your thermostat to run at an even temp.


The U.S. auto market is returning to more normal prices after several years of higher-than-normal prices for new and pre-owned cars.11 It may be time to look for a more energy efficient vehicle.

There are practical ways to save on fuel when driving a vehicle. Don’t be a lead foot. Reducing your speeds can result in a reduction in fuel costs (and you could save yourself a speeding ticket).

But to really save on the pocketbook, opt to bike short distances or use your city’s public transportation. Invest in a discount card if you plan to take the train or bus on a regular basis.

Yes, cost of living prices are high. But there are things you can do to manage them so that you feel more in control.

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1. Chernikoff, Sara. “Who spends the most on groceries each week (and who pays the least)? Census data has answers,” January 20, 2024,

2. Hicks, Coryanne. “How Inflation Affects Your Cost Of Living,” February 7, 2023,

3. Pichee, Aimee. "Americans need an extra $11,400 today just to afford the basics, Republican analysis finds,” November 30, 2023,

4. Egan, Matt. “First on CNN: Two out of three workers say prices are still rising faster than wages, new survey shows,” September 25, 2023,

5. Bremen, John M. “Why Salary Increases *Still* Do Not Align With Inflation,” May 17, 2023,

6. "Latest Cost-Of-Living Adjustment,”

7. Pichee, Aimee. “Social Security is boosting benefits in 2024. Here’s when you’ll get your cost-of-living increase,” December 19, 2023,

8. Carbonaro, Giulia. “Five Ways Americans Are Cutting Back Spending to Combat Rising Costs,” July 10, 2023,

9. Durrani, Ana. “Monthly Utility Costs In The U.S. By State,” March 9, 2023,

10. Wakefield, Faith and Addison, Tori. “Vampire Energy: What Is It, and How Much Is It Costing You?”, October 10, 2023, MarketWatch.

11. "Cox Automotive’s Forecast: 2024 – A Return to Normalcy in the U.S. Auto Market,” January 3, 2024,

This is a general communication for informational and educational purposes. The information is not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. If you are seeking investment advice or recommendations, please contact your financial professional.

DOFU 3-2024