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Overcoming Inflation: How to Budget as Prices Rise
Climbing prices on daily necessities can certainly be unsettling to watch. New studies suggest that inflation is costing the average U.S. household an additional $296 per month. These changes are impacting every individual to a certain degree. We are now reaching a point where many of us must reevaluate our finances and make modifications based on our personal financial situations. Orlando Credit Union is sharing the top 5 things to consider when making budget adjustments to overcome inflation.
Say “No” to Added Debt
With prices rising and most paychecks remaining the same, it can be easy to overspend. Telling yourself, “I’ll pay it off once prices go down” is a statement that has the potential to set you up for future financial challenges. When tempted to use credit cards to make ends meet, just say “no.” Instead, consider each charge carefully and continue to pay more than the minimum payments. You may also want to consider using the credit card in your wallet with the lowest interest rate or looking for a lower interest rate credit card if you don’t already have one. Orlando Credit Union offers many low-rate options, and no balance transfer fees, making it possible to not only avoid added debt, but also manage existing debt.
Determine Wants vs. Needs
One of the easiest ways to save is by determining a want versus a need. Many of us carve out a certain amount of money in our weekly budgets for activities that we enjoy. It might be $100 for date night or to get our nails done, or maybe $50 for a new pair of shoes or clothes. However, it is important to remember that these little luxuries are wants and not needs.
Evaluate your spending habits and give yourself alternative options. For example, if you find that buying a coffee on the way to work is draining your bank account, opt to make coffee at home or grab a cup once you’ve arrived at the office. Additionally, monthly payments such as streaming services are another luxury you may want to consider cutting. Select the single most watched streaming platform that you are currently paying for and cancel the remaining platforms. Making these minor changes now can prevent you from struggling in the future.
Reconsider Brand Loyalty
When grocery shopping, many of us have our go-to brands; the ones we always reach for on the shelf. A great way to save some cash at the store is to consider the cheapest option. Usually, you can snag the store brand’s version of the item for a more affordable price. It is important to remember, in many cases, the store’s brand is manufactured by the same companies that put out our favorite name brands.
Don’t Stop Saving
Although it might be tempting to take a pause on saving, continue to prioritize committing a portion of your paycheck to your savings and retirement accounts. During times of financial uncertainty, knowing you have savings can not only give you a sense of stability, but it can also position you better for the future. Even if you are unable to allot the typical amount you usually save, putting away anything is better than nothing.
Research and Reassess
Gas and grocery prices are seemingly changing weekly. In turn, your budget should be changing in tandem with those prices. It is important to research the fluctuations and adjust your budget accordingly. There are some great apps to help you find lower prices and bargains. Rakuten, Groupon, and RetailMeNot are a handful of options you can explore for savings on many everyday purchases. Additionally, apps such as EveryDollar and Mint are beneficial in mapping out your budget and better navigating financial changes you may make to your daily, weekly, and monthly spending.
As we continue to maneuver the financial impact inflation has on every household, we strive to give our members financial guidance while considering each unique situation. The credit union has knowledgeable professionals that are available and eager to work with each individual to find the best option for them. For more information, reach out to any of our branches or call center for options on how we can help you best combat inflation.