In today’s economic environment of higher interest rates, inflation (aka higher prices) and a potential recession on the horizon, it’s important to get back to the basics in managing our finances.
Review your budget. Make a list or use an app to track your expenses. Most banks offer software to categorize your transactions appropriately. This will allow you to see where the majority of your funds are going and manage unnecessary spending.
Lower grocery bills. Shop around for the best deals. Refer to the grocery store’s online ads to see what is on sale. If possible, cut back on unnecessary items. Get creative with leftovers, and repurpose meals with online recipes. If you are back in the office, take your lunch to work.
Save this school year. Need to buy supplies? Take inventory of what you still have from previous years. Use the same backpack until the item goes on sale. On a recent Today Show segment, a neighborhood bought school supplies in bulk and shared the cost and items; a great way to save! If your child is heading to their first year of college, keep them on a budget; meal plans may not be enough. If they are returning to school and sharing an apartment, be mindful of gas, electricity and groceries that may not have been anticipated. This is a good time for them to learn budgeting!
Cut the credit cards. Interest rates on cards have increased; if you need to use one, try to pay off the balance each month.
Manage memberships and auto-pay. Did you sign up for a free trial and forget to cancel after the trial period? Cancel those subscription services you haven’t used in months, or forgot about. Research internet, cable and other service providers to negotiate a better deal or find a new one.
Save energy. Make a point to turn off electric powered items when not in use or when you leave the room. Do laundry early in the morning or late at night. Small changes can add up to big savings.
Downsize. Clean out the closet and sell unwanted items through apps like Poshmark, Mercari and The Real Real. Or donate them to charity for a tax write off.
Be mindful of impulse buying. Take a moment and ask yourself if you really need that item now. If you are shopping online, add the desired item to the wish list or save for later and come back to it in a few days. The intrigue may pass with time.
Keep your dentist and doctor appointments. A co-pay or teeth cleaning is better than paying for health issues down the road that could have been prevented.
Review your investments. Don’t stop your 401k or retirement plan contributions. If possible, add to the pre-tax contribution to help with current tax savings. If your accounts are down, speak with your advisor or get a second opinion to see if you’re still on track to meet your financial goals.
Michele Sarna is a certified financial planner™ with Beacon Pointe Advisors and can be reached at (760) 932.0930 or [email protected].
Provided as information only and should not be considered investment, tax, or legal advice or a recommendation to buy or sell any type of investments. Asset Allocation, portfolio diversification, and risk strategies cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Form ADV contains important information about Beacon Pointe Advisors, LLC, and may be viewed at www.adviserinfo.sec.gov.