Continued inflation and rising interest rates can significantly affect your budget. However, a little bit of planning can make a big difference when it comes to your managing your household finances. Our partners at GreenPath Financial Wellness, a trusted national nonprofit, have shared some tips for creating a budget during difficult times.
Set Your Priorities
First, create a spending plan. Write down everything you plan to spend each month, including loan and credit card minimum payments, anticipated utility bills, and rent or mortgage payments. Also put a dollar amount on what you plan to spend on gas, groceries, and other essential items throughout the month.
With the holiday shopping season right around the corner, consider making a separate plan specifically for holiday spending. Include amounts for gift purchases as well as spending related to holiday gatherings.
GreenPath says a spending plan helps to ensure that what you spend matches what you make each month as prices rise. Setting aside specific dollar amounts for each line item in your budget gives you the information you need to juggle additional expenses as they come up. Sticking to spending limits and understanding your spending priorities also helps to reduce the potential of increasing credit card balances.
Stick to Your List
Once you have built your spending plan, start utilizing shopping lists. This goes for grocery shopping, holiday shopping, and even everyday spending. GreenPath says that using a shopping list can be the most powerful way to manage finances, especially in the face of rising prices.
Before you head to the grocery store, take inventory of what you already have in your refrigerator, freezer, and pantry. Check your paper products and cleaning supplies, too. This is especially important for products with high prices, such as cooking oils and household items. Purchase higher-priced items when they’re on sale if you can.
Next, plan your weekly meals with the items you already have in mind. Once you’ve purchased your groceries, don’t be tempted to go for takeout. Sticking to your meal plan is just as important for your finances as sticking to your grocery list. Prepping meals on the weekend, when you have more time, can help.
Stay Flexible
Using a shopping list sets you up for success when it comes to sticking to your plan, but it’s also important to stay flexible. You may have to shop around for the best prices to stack up your savings. If that’s the case, be mindful of the distance you’re driving between stores, as that can add up if you must travel long distances.
You may also need to be flexible with the timing of your purchases. Do you need it now or can you wait for it to go on sale?
Managing your finances as prices rise may feel overwhelming. But it doesn’t have to feel that way. Remember that you can always shift your plan as needed, which is easier to do once you have your initial spending plan in place.
