If a Company Has Adopted Continuous Budgeting the Budget Will Show Plans for
If you've pulled up to the pump or strolled through the produce aisles lately, you've probably noticed the prices of everyday items rising — sometimes seemingly overnight. The same thing is true for services, too; what $100 could get you in the past isn't the same as what it buys you today.
If your income hasn't risen in step with this process of inflation for goods and services, it can feel frustrating each time you shop for necessities. And even if you have a carefully planned budget, needing to make constant adjustments to accommodate rising costs might make this positive financial habit seem ineffective.
But don't abandon budgeting just yet. With some deeper strategizing and these actionable tips, you can create a budget to beat the rising costs of inflation. Get into the spirit of World Financial Planning Month and start formulate new plans with this guide.
If you own your home, refinancing your mortgage could be one of the top ways to build more room in your budget. With this process, you get a new mortgage with a lower interest rate than your existing one. This new loan pays off your old mortgage, and the lower interest rate or longer mortgage term means lower monthly payments. You can put the extra money you were paying for your old home loan towards other bills or budget line items instead.
Generally, it's best to refinance your home loan if you can lower your interest rate by at least 0.75% — but more than that is always better.
2. Do an Energy Audit on Your Home
Performing an energy audit can be good for your budget — and the planet. Energy auditing is a process that helps you identify features in your home that waste energy, such as inefficient appliances, energy-consuming furnaces, low-quality insulation and poorly maintained windows. It'll also help you determine how much energy your home consumes so you can make a plan to fix these issues — and start saving money on utility bills.
By spending $200 to $700 on an energy audit and implementing the recommended changes, you could save 25–30% on your yearly energy bills. Although this option can cost a bit more up front, it'll save you much more money over time — money that comes in handy when you need to buy other essentials.
3. Eliminate Monthly Fees or Subscriptions
Can you name all the subscription services you're currently paying for? If not, it's likely you won't miss them if you cancel them — but you will save some money you can put towards other necessities in your budget. Like other subscription-happy folks, you may be spending as much as $273 per month — that's $3,276 each year! — on subscription services. Of course, there's nothing wrong with that if you use and enjoy the services. But if you've signed up for and subsequently forgotten about them, it's time to put a stopper on these wallet-draining costs.
Streaming services you don't watch are an obvious example, but don't forget about memberships, too. Around 32% percent of Americans pay for gym memberships, and about half of those go unused. Other common subscriptions you may be paying for and not using include cable TV packages, dating apps, music services and online magazines.
It's easy to let subscription costs get out of hand. After all, they're usually automatically deducted from your accounts, and these "out of sight, out of mind" charges are easy to forget about. Take some time to print out recent copies of all your bank and credit card statements, and review them to determine what subscriptions you're paying for. Then, go through this list to figure out which ones you need and which ones you can live without.
4. Shift Up Your Fuel Habits
If it seems like prices at the pump are skyrocketing, it's not because your eyes are fooling you. In June of 2022, the national average price for regular gas rose to more than $5 per gallon. Fortunately, there are a few things you can do to save money on gas.
Other strategies you can use include:
- Carpooling with coworkers, using public transportation or working remotely a few days a week
- Using rewards cards and programs to get discounts
- Consolidating errand stops into one trip out per week
- Monitoring your tire pressure to get maximum miles per gallon
- Driving in your vehicle's econ mode if it has one
5. Change Your Travel Plans
A vacation is great for the soul — but it can also be pretty costly. To make the best of your budget while still enjoying some rest and relaxation, you might want to consider switching up your travel plans while you build a better budget.
If you're planning a trip abroad, for example, think about domestic travel options instead. And if you're debating whether or not to make that cross-country road trip, you might want to revisit the idea and plan a staycation nearby to save on gas and lodging costs.
It's also worth keeping in mind that you should travel during the off-peak season when possible. During this time, there's less demand for hotel bookings and other reservations at your destination. Summer is almost always the peak tourism season in most locales; think about postponing your trip until mid-autumn or springtime instead.
6. Budget Better for Groceries
In a typical U.S. household, people spend around $7,500 on food every year. Of course, food is one of those non-negotiables we all need to buy — but that doesn't mean you shouldn't try to save. To beat the costs of inflation, it's time to start shopping for groceries more strategically.
First and foremost, you always want to shop with a list. This helps you focus on getting what you need and can keep you from adding impulse purchases — which can drive up the cost of your bill — to your cart. It's also a wise idea to draft your lists based on what's on sale for the week. Pick up a copy of the weekly ad flyer, and don't be afraid to clip coupons.
It can also help to get more hands-on with your cooking. Premade meals are convenient, of course, but they cost more. This is also true of items like pre-cut vegetables and pre-shredded cheese. Try setting aside a few hours every Sunday do do some prepping for the week so you can make good use of budget-friendly whole foods.
Source: https://www.askmoney.com/budgeting/budgeting-for-inflation?utm_content=params%3Ao%3D1465803%26ad%3DdirN%26qo%3DserpIndex&ueid=e9e8382e-a1c6-463e-b69a-98e6cbdabc42
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