Managing Your Household Budget During Inflation
When it happens, inflation affects everyone, but it can touch people differently, depending on your particular area and household. Coping with inflation means managing budgets, creating spending plans, and keeping a close eye on what money is coming in and going out related to your personal finances. If you're concerned about what is going on with inflation, interest rates, and the costs of everyday items, you aren't alone.
Some of the best ways to navigate rising prices are through budgeting, monitoring debt, and saving. All three can ease the burden of rising inflation. As prices of goods and services continue to go up and families search for solutions to meet their basic needs, all three can be a challenge but are no less important.
The following tips can help manage your debt and household expenses at a time when we're all paying closer attention to every dollar.
Your household budget can get away from you if you’re not careful. Those seemingly small monthly bills can add up and eventually have an impact on your overall budget. To stay on track with your household budget, look realistically at everything you spend on a monthly basis. While you should be mindful of costs and income, it doesn’t mean you have to go to extremes. Understand where you are right now, and spend appropriately.
IAACU has a great tool that can help you budget your monthly income and expenses. Check out the Money Management tool in your IAACU online banking account.
Along with tracking your income and expenses, you also want to monitor your debt. To keep up with rising prices, you may be using your credit cards more than you normally would. Missed or even late payments can affect your credit report, making it more challenging to get favorable interest rates or make larger purchases.
If things are tight, consider cutting out things you don’t need, like streaming subscription services. You can also contact service providers like cable or mobile phone bills to negotiate a lower rate.
By using My Credit Score through your IAACU online banking account, you'll be able to monitor your credit score and payments.
Regular budget reviews give you a chance to consider what expenses are must-haves, wants, or items you could consider cutting out altogether.
Spending & Saving Plan:
To get a better handle on where your hard-earned cash is going, especially during rising inflation, it helps to create a spending plan. Your spending plan should include all of your income and expenses. What money is coming in, what is going out, and what you are saving?
Some ways to meet your spending plan would include: creating shopping lists and sticking to them, looking for bargains, and buying non-perishable items in bulk.
In addition to your regular monthly costs, your plan should also include financial goals you hope to meet, like a family trip or large purchases. Club accounts are a great way to set up a savings plan. With a Club Account at IAACU, you can schedule automatic transfers or payroll deductions to make saving easy. Plus, you'll earn a higher interest rate than on a basic savings account!
We know what we read in the news, but is there anything we can do to make inflation’s impact a little easier to deal with? As much as possible, even during these challenging times, you want to have a plan and stick to it. That means being a smart shopper, not overspending, looking for deals where you can find them, being careful about credit spending, and creating a spending/saving plan. Things are challenging right now, but with the right tools, you can start to see a future and things returning to some resemblance of “normal.”