tips for managing your finances during high inflation
Inflation occurs when the prices of goods and services rise in the economy. Unfortunately, an increasing inflation rate typically affects a consumer’s purchasing power. Therefore, reevaluating your finances is more important than ever during these times!
Continue reading for the various ways you can save and manage your money - and check out the following video to learn everything you need to know about inflation:
managing everyday expenses
Everyday expenses, including housing, food, utilities, and gas, can be the hardest to manage when inflation is high. This is because you need to pay for them each month - regardless of how high prices become. Understandably, this is also one of the most frustrating outcomes of inflation. Knowing where to begin and what initial steps you can take to stay ahead can be challenging.
A great place to start is tracking your spending and reevaluating your budget. From there, you can easily determine what areas of your finances could be adjusted to save money. For example, products or services you're overspending on and where to cut costs.
- Start with your most important expenses – everyday costs, debt, and savings. Once you’ve made sure those are covered, you can begin working on the other categories of your budget.
- Reevaluate your budget at the beginning of each month. Look ahead to see if you have any special events or appointments you’ll need to budget for. This will help you stay prepared and avoid expenses coming out of nowhere.
- Create an emergency fund. Having money aside for unexpected events such as medical expenses or car maintenance will help you manage a hefty bill.
tips for cutting costs
- Consider shopping at discount grocery stores. Most generic products are exactly the same quality as the name-brand ones. The only difference is the fancy packaging.
- Take a look at your subscriptions. Many people don’t realize how much their subscriptions add up because they only focus on each individual price. $10 for a streaming service doesn’t sound too bad – but if you have multiple of them, it can get pricy quick. Consider temporarily dropping the ones you don’t use as often or finding a bundle option to get a better deal.
- Take advantage of coupon and budgeting apps like SnipSnap, GoodRx, and GasBuddy. Many businesses also offer rewards programs where you can earn points and redeem them for merchandise or use them to pay. BlueOx Credit Union offers our ScoreCard Rewards program that allows members to combine their points from their Debit and Credit Cards AND can be conveniently cashed in right from their Mobile App!
After you’ve determined where you can save - consider putting some of your extra funds into a savings account, certificate of deposit, or use it to pay off debt. It’s imperative to continue saving during high inflation, even if you have to scale back slightly. As you continue reading, you’ll learn more about debt and how inflation negatively influences it. Allocating a little extra money toward your payments could make a huge impact as you adjust to inflation.
managing the holidays
The holiday season is right around the corner, which means the most expensive time of year for most people is coming up. According to financial experts –seven out of ten people claim they go over their budget around the holidays. However, as prices continue to be impacted by inflation, people must remain aware of their spending. Check out some tips for celebrating the holidays without breaking the bank:
- Set a spending limit and stick to it! Budgeting worksheets, such as the Holiday Budgeting Worksheet from our partners at GreenPath, are extremely helpful when preparing for holiday shopping.
- Have a big family or group of friends? Arrange a gift exchange such as Secret Santa, where everyone is only required to buy a gift for one person instead of the entire group. The same goes for food at a large event – make it a potluck and ask everyone to bring a dish to pass.
- As tempting as it may be - don’t use your credit card to pay for holiday gifts. This may cause you financial stress down the road if you only plan to make the minimum payment afterward. For example, studies have found that 75% of people cannot pay off the debt they accumulate on their credit cards from holiday shopping by January. This results in hefty interest fees and years of payments! Stick to your budget and try to set realistic expectations.
pro tip: People are most likely to be affected by identity theft scams and other cyber security attacks during the holiday season. Stay prepared and protect yourself from these crimes by signing up for our identity theft protection service, IDProtect Plus.
managing your investments
Investing is the one aspect of inflation where people can come out ahead financially! This is because higher rates lead to a larger return on your money. Take advantage of Certificates of Deposit (CDs) and Money Market Accounts that already have higher rates and dividends. Many financial institutions are also offering specials to their members to help them remain financially healthy. BlueOx Credit Union currently has an Add-On Certificate special:
- long-term savings special
Add on as much as you want - whenever you want and earn 4.25% APY*! Unlike our other CDs, the add-on CD allows you to deposit funds at any time throughout the term - allowing you to maximize money earned. Start slow with a minimum of $50 and take advantage of ONE rate bump over the term of the certificate!
Click below to learn more and get started or call a Member Service Advisor at (800) 648-8035.
pro tip: Did you know CDs are considered one of the safest forms of investing? It’s true! Check out our blog, How do Certificates of Deposit Work?, to learn all about CDs and determine if it’s the right option for you!
When inflation is high, creating a plan for paying off your debt is essential, especially on accounts with a variable rate. This is because the interest rate and fees you must pay will rise as inflation continues to rise.
If you can’t afford to pay more toward your debt, ensure you are at least hitting your minimum monthly payment. Missing payments will lead to high late fees and will hurt your credit score. Reach out to the financial institution associated with your debt if you think you’ll be unable to make an upcoming payment. Many businesses are happy to work with people by offering extensions or temporary solutions - such as BlueOx Credit Union's skip-a-payment.
pro tip: Take advantage of 0% APR on Credit Card balance transfers at BlueOx Credit Union for the first six months. This is a great way to lower your monthly payments when interest rates rise. Learn more about the benefits of balance transfers from our blog: Everything You Need to Know about Credit Card Balance Transfers.
One of the best options to help you manage your finances during high inflation is to utilize free debt management services such as our partner, GreenPath Financial Wellness.
GreenPath has more than 60 years of experience helping people build financial health and resiliency. Members of BlueOx Credit Union have access to all their services, including free financial counseling, housing services, student loan counseling, and more! Click the link to learn more and get started today by calling (877) 377 – 3399.
*APY = Annual Percentage Yield. Fees may reduce earnings. Federally insured by the NCUA. Minimum of $50 in new money deposited. New money is defined as money not currently on deposit with BlueOx Credit Union. Allows for additional deposits as well as one rate increase per member request throughout the term of the CD. Penalties still apply for withdrawal before the maturity date of the CD.
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