Rising costs have affected everyone's budget, including higher prices on groceries, gas, rent, and more. Inflation is currently at its highest in 40 years, and increasing costs mean less money in your wallet and bank account. It's easy to fall behind when prices get out of hand.
Despite the pain of inflation, we've got some tips for you to ease the financial burden and meet those price demands head-on. Now is an excellent time for a financial check-up to see what's working and what's not.
Re-Assess Your Budget
Start by updating your budget to reflect the higher costs you pay for each spending category today.
You might need to reduce spending in non-essential areas to balance things out. Do you have any subscriptions you no longer use? Can you take your lunch to work more often or brew coffee at home? Sometimes the little things add up to more significant savings and money for more critical needs.
Try our online spending calculator to get a bird's-eye view of where your monthly spending goes. This view can give you a better idea of which areas might need more scrutiny over others. Finally, if you don't yet have a budget, now is the perfect time to start. A budget might not be the most exciting thing to create, but it'll keep you on track with your bills and spending habits.
Re-Imagine Your Savings
Saving during inflation is vital. According to a recent Bankrate survey, 56% of Americans cannot cover a $1,000 emergency. A lack of money when you need it is a bigger problem when prices are high because your savings have less buying power than before inflation. Look for creative ways to increase your savings. Here are three suggestions.
Prioritize your emergency fund
Emergencies pop up when we least expect them and often when we're unprepared to meet them. Rather than rely on a credit card to cover these, stash extra cash in your savings account and build your emergency fund. To fully fund your account, aim to have enough money in savings to cover 3-6 months of living expenses.
Set Up Recurring Deposits
Split your paycheck between savings and checking. Designate a percentage or a specific amount of each paycheck to go directly into your savings account while the rest goes into your checking account. Then, watch your savings grow.
If you added $10 twice a month, you'd have an extra $240 savings in a year. Add $50 twice a month, and you'd have $1200 saved in a year.
If you need help setting up an automatic deposit, get in touch with us.
Deposit Money in High-Yield Accounts
Grow your money faster with high-yield deposit accounts like share certificates and e-Life checking accounts. These accounts pay much higher dividends than standard savings accounts. The longer you leave your money in high-yield accounts, untouched, the more it grows.
Pick Up a Side Hustle
If your finances are too tight to give your savings a bump, consider taking on a side hustle to kick things up a notch. You'll gain the ability to save and, in turn, more financial peace of mind. Side hustles don't need to take up much time, either. Some people do them part-time. Others might only commit a few hours a week with platforms such as Door Dashing, Uber, Lyft, or something else. Use your skills and imagination to find a hustle that's right for you.
Sell Something You Made
Are you crafty? Consider making something and selling your creations locally or online. For some, a hobby transforms into the perfect side hustle. For others, it's a fantastic income-generating hobby.
Sell Something You No Longer Need
Look through your closet or storage spaces and see if there's anything you no longer need. Clothes that no longer fit or household or electronic items you no longer want or need are good choices. If you have the space, consider selling them in a yard sale. Or you could sell them in online markets — local or national. Remember to mark up the prices for shipping if you need to mail or ship items to other locations.
Conclusion
There are ways to combat higher costs without sinking your savings. However, sometimes you must get creative to overcome the obstacles that lay ahead. Maintaining a realistic budget that aligns with your current costs is one solution, but don’t forget to explore creative ways to boost your savings. And consider a side hustle, if needed.
We also understand that sometimes even the best plans need a little help. If you need one-on-one advice to get started, schedule an appointment. We’re here to answer your questions and help you along the way to financial health.
