Inflation had not been discussed publicly until lately, and with good reason. According to the Consumer Price Index, the overall annual rate of inflation was at 1.8 percent in late 2019. (CPI). Similarly, the US Department of Agriculture reported that retail food costs in February 2020 were 1.8 percent higher than the previous year.
In the summer of 2021, however, inflation reared its ugly head once more, with the greatest annualised increases in US consumer prices in over 13 years. It needs to be observed whether the higher prices will last or if they are only temporary as a result of the economic recovery following the COVID-19 pandemic.
Follow these 10 actionable tips to stretch your money-
Even if you own or rent, the consequences of recent inflation have undoubtedly affected your budget. While you may be helpless to affect the current economic situation, you may still take steps to prevent rising expenses. Inflation reduces your purchasing power, causing you to spend more and receive less. As a result, increased prices make saving money and meeting financial goals more difficult. Maybe you’re not ready to make big changes like downsizing your residence or using public transportation. Instead, begin with little modifications that will stretch your budget and give you more bang for your dollars.
1) Plan ahead:
You may optimise your savings by planning forward for the next quarter, or perhaps the entire year. Furthermore, setting aside three to six months’ worth of living expenses as an emergency fund helps prepare you for any unexpected events.
Maintaining an emergency fund will protect your finances in the future from unexpected expenses, such as illness, accidents, or loss of income.
Estimate your expected expenses for the next 6-12 months and see which ones you can start saving for right now. Christmas gifts, birthdays, tuition, vacations, annual bills, and other costs can all be saved for with sinking funds.
Each month (or paycheck), save a tiny bit until you have enough money to cover all of your expenses. To avoid accidental spending, keep your sinking funds in a separate savings account.
2) Negotiate your bills:
Negotiating your bills each year is an excellent strategy to stretch your dollar. You’ll be surprised at how many of your service providers will agree to cut your fees if you make a simple request.
Examine your monthly bills and compile a list of service providers to contact. You can call the company or, if they offer one, use their live chat tool. Tell the person you want to lower your monthly payment and ask about their best offer. Expect a few “noes” and a lot of “yeses,” especially if you’re nice and kind when asking for a discount.
Your best hope for medical bills is to contact the billing department and offer to pay a portion of the entire sum. Frequently, the provider will settle the account for a fraction of the amount outstanding.
3) Track your spending:
It’s time to start tracking your expenditures if you’re always wondering where your money went. While you may have a basic notion of where your money goes each month, how exact are you? Do you know how much you spent on groceries, gas, and dining out last month, for example?
Make a list of how much money you spend in each budget category. When determining how much rent or car payment you can afford each month, having a better understanding of your spending is very vital.
Take out your phone or a notebook and write down every time you spend money. Fix expenses are not included because they will be tracked in your actual budget. Instead, keep track of your Target runs, supermarket runs, and coffee breaks.
If feasible, keep track of your spending for a month. If you can’t commit to a month, make it at least two weeks. Enter your spending data on a spreadsheet or color-code your spending with highlighters at the end of your tracking period.
4) Set financial goals:
When it comes to your finances, goal planning is a critical — but frequently forgotten — stage. Don’t worry if it seems a little early given your existing circumstances. Setting goals and putting a plan in place to achieve them is extremely effective.
Working, saving, and spending more intentionally when you have a definite objective in mind. Furthermore, concentrating on your financial objectives will provide you with the clarity and motivation to make great financial decisions.
5) Avoid overspending:
Overspending has a way of sneaking up on you. What may seem like a few $10 swipes a week can soon add up to huge credit card balances or going over budget.
Consider making the following basic modifications to cut your overall spending:
- To avoid impulse purchases, get groceries online.
- Reduce how often you shop online (e.g., order from Amazon only once per month)
- Make a “wishlist” of things you want or need. Check your list when you come across a good offer; if the item is on it, buy it. Move on if it isn’t.
- Unsubscribe from retail communications that entice you to buy something.
- Make a budget category for personal expenses. Setting aside a set amount of money to spend anyway you choose, guilt-free.
Overspending can be deceiving. In actuality, overspending is nearly always the result of an emotional reaction rather than actual spending. As a result, the key to minimise overspending is understanding and avoiding your trigger(s) (them).
Consider the last time you felt embarrassed or guilty about overspending. Then dig deeper to figure out what emotion was driving your spending. Were you exhausted? Have you had a particularly awful day at work? Did you have a quarrel with your partner?
6) Live on a budget:
Developing the ability to stretch your money further necessitates a certain amount of financial expertise. Do you have a strategy for how you’ll spend your money after your paycheck arrives in your bank account, or do you just go with the flow?
A budget is a spending plan, and having a plan is essential. Setting a budget simply entails making a strategy for how you’ll spend your money. Learning to live on a budget entails creating a spending plan on a regular basis and taking steps to keep to it during the budget period.
Budgeting is a long process
Expect a learning curve as the first step toward good budgeting. Learning to budget is a valuable skill that takes time to learn. So, even if it feels like you’re doing everything wrong, commit to pushing through the difficult months.
Make your own budget
Don’t be overwhelmed by the many budgeting styles and possibilities that a fast Google search for “how to budget” will reveal. As your budgeting skills improve, you’ll begin to see which approaches work best for you.
Budgeting should be approached as one-size-fits-some rather than one-size-fits-all. Budgeting can be done in a variety of ways. And, when used consistently, each one will help you get closer to your objectives. You may discover that you prefer to manage your finances using digital tools or that you want to organise your paper budget using a budget binder.
Humans have a nasty habit of making things too hard, but budgeting doesn’t have to be that way. There are simpler options to help you stretch your money further if you’ve tried percentage-based budgeting and failed miserably.
7) Plan your meals:
Meal planning, more than any other recommendation on this list, has the potential to stretch your budget further. Your grocery bill has most certainly been climbing month after month. Make a grocery list based on the meals you’ve planned.
Meal planning does not entail making a mental list of foods you want to eat while grocery shopping. Going to the grocery store without a strategy will almost always result in you going over your budget.
In the United States, food waste amounts for 30-40% of the food supply (as of 2021). Grocery shopping without a plan sometimes results in a fridge full of underutilised fresh fruits and vegetables at the end of the week. If your monthly food budget is $1,000, $300-$400 will almost certainly be squandered if you don’t plan ahead.
8) Get a programmable thermostat:
Unfortunately, energy prices are also rising. Even if you’re attempting to save money, you’ll notice a rise in expenditures throughout the summer months, depending on where you live. An Energy Star Certified programmable thermostat, on the other hand, can save you up to 8% on your annual utility bills (about $50).
A programmable thermostat will not only save you money, but it will also allow you to regulate the temperature with your voice if you get one that works with Amazon’s Alexa or Google’s Home systems.
Save twice as much
Some programmable thermostats might cost up to $200, but there are more reasonable options. Many natural gas and electricity companies also provide refunds for switching to a programmable thermostat.
The rebate amount may even exceed the cost of the thermostat in some cases. Before you buy a thermostat, check with your provider to see which models are eligible for rebates in your area.
9) Get a side hustle:
Cutting costs and saving money is undeniably a sound method for getting the most out of your money. However, concentrating on boosting your income while doing so will send your finances into overdrive. Finding new, inventive ways to generate little amounts of money in your spare time will also help you diversify your income and get closer to your financial goals.
Profit from your passion.
The good news is that we live in an era where you can create money in a variety of creative and fascinating ways. You won’t have to work overtime at a job you despise just to meet your monthly rent payments.
Cutting costs and saving money is certainly a good way to get the most bang for your buck. Concentrating on increasing your income while doing so, on the other hand, will put your finances into overdrive. Finding new and creative ways to earn little amounts of money in your spare time will help you diversify your income and move closer to your financial goals.
Make money from your hobby
The good news is that we live in an age where you can make money in a variety of interesting and creative ways. You won’t have to put in extra hours at a job you hate just to make your monthly rent payments.
10) To stretch your money, try a savings challenge:
Competitions and challenges can be incredibly inspiring. Even grownups can find satisfaction when usually disagreeable duties are turned into a game. Begin with a basic task, such as saving each $5 bill you receive or depositing your loose change in a jar for a set period of time.
Are you a naturally competitive person? Solicit the participation of a few close friends or family members. Holding each other accountable and increasing the competition aspect will benefit you all.
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