A core belief of our financial planning practices is to focus on what you can control.
You cannot control the rise in gas prices. You can’t check if grocery prices have gone up about 9 percent in recent years. You also cannot control the prices of rents and housing across the country.
And while you can control how much money you make, it’s a long-term game designed to increase your income. It’s not something that happens overnight.
So what do you directly control? How to spend and save your money.
Here are 7 ideas to help you do just that:
1. Estimated consumption estimate
Review your budget and think about whether the category (or perhaps just the amount of money in the category) fits your values and goals.
For example, family time can be an important value. In this case, weekly dinners with your siblings and their kids can be a ritual for your family that can’t be discussed – even if someone would argue it’s not a big expense because you can just dine at home.
2. Change your shopping site
Instead of buying cold turkey when you’re used to it, find ways to switch from expensive products to economical alternatives. Choose a generic brand instead of a brand name; Choose the usual mid-range option instead of the more expensive option (where only marketing and branding differ.
3. Click pause when updating your gadgets
It seems like there will always be a new update for all of our technology. However, if you feel inflationary pressure, resist the urge to upgrade your hardware now.
If you never run out of the functions you need, you can wait until you spend more on something completely new. Extend the life of your technology as much as possible and save extra money just by waiting.
4. Borrow or negotiate before buying
When you feel inflationary pressure, it may be wise to find alternative ways to get the items you need. There are many opportunities where it can make sense to borrow items or buy used items.
An example that seems particularly relevant in our family at the moment is baby equipment: from furniture to clothes to toys and more, this is an area where we have been able to get hands on relatives with older children.
Babies grow and change so fast, it’s amazing how many sizes we’ve actually beaten with our 7 month old!
5. Automate your accounts
If you haven’t already, make sure you don’t give away the extra money for no reason – for example, you’re late on payment because you forgot to pay or pay your bill. Join an automatic payment schedule or set a calendar reminder so you don’t pay more than you need for your bills.
This will help ensure that you don’t lose money trying to save a little extra money. However, even your savings can be adjusted if the increased price pressures are currently putting a serious strain on your budget.
6. Modify your saving strategies
If you’re currently saving for a big purchase but the prices are too high and you think your goal hasn’t been met, consider extending your time zone. This means that you can save a small amount each month and continue to make progress.
Let’s say your goal was to save $12,000 in 12 months, so you have to save $1,000 to meet that deadline.
If you increase your goal to 20 months, you’ll be able to earn $600 per month and still reach your goal in the future — and free up $400 per month to meet your current needs and cost you more.
7. Put your FSA and HSA dollars to work
Now might be a good time to take advantage of a Flexible Spending Account (FSA) or Health Care Expenditure Account (HSA) if you have one.
The money you deposit in these accounts allows you to pay for health care and childcare expenses with cash before taxes.
Really adjust your spending to live your favorite life
When it comes to maintaining your budget in the face of rapidly rising inflation, there are many ways you can adjust your spending by living the way you want to.
Take some time to research your budget and spending habits and remember that the best way to spend the money will be for you alone. What works for your sister’s family may not work for you and vice versa.
But first and foremost, remember that sacrificing for your lifestyle isn’t usually a good long-term strategy.
If nothing else, it might be a good time to go back to your list of values and priorities to make sure your spending habits are still aligned with what’s most important to you.