With inflation on the rise, it may be more difficult to stick to your monthly budget than before.
However, it doesn’t need to derail your long-term financial plans! Instead of waiting and worrying about
economic factors that are beyond your control, you can make small changes and feel empowered by
your ability to manage your money through these 7 fundamental tips.
Pay down high-interest debts – Did you know that Americans owe more than $860 billion in
credit card debt, with the average person owing more than $5,900? If you have credit cards with
variable interest rates, you will likely see your interest charges go up, and this can make it even
harder to pay your cards off. If possible, consider transferring balances to cards with low (or
even zero) introductory rates, and try to avoid charging new debt.
Start saving for a rainy day – Believe it or not, there is an upside to inflation. The higher interest
rates that cost you money on loans and credit cards can earn you more money on savings
accounts. Now is a good time to find a high-yield savings account and build your rainy-day fund.
Invest extra cash – If your high-interest debt is paid down and you have a healthy emergency
fund, put your cash into investment accounts like a 401(k), IRA, or brokerage accounts. These
accounts have a higher rate of return than savings accounts, but the money isn’t accessed as
easily – which is why its important to have savings accounts for short-term emergencies and
investment accounts to build wealth over the long term.
Get the best prices – Have you recently shopped around for insurance coverage, cell phone
plans, or cable/internet services? You could be overpaying or missing out on discounted
services. If you don’t want to change providers, you can call and try to negotiate a lower price.
Be sure to ask to be put through to the cancellation department, because these employees are authorized to give the best discounts.
Cut unnecessary costs – Make sure to cancel any trial subscriptions and memberships that you
don’t want to keep. Review your bank records and cut any subscriptions, memberships, or
services that you don’t enjoy much or utilize often.
Evaluate your spending – It can happen to anyone – the tendency to eat out often, or going
shopping for clothing, accessories, etc. It’s important to analyze your monthly budget to see
where you can cut down on your spending, whether it’s limiting your coffee runs to 1-2 times
per week, or buying off-brand items at the grocery store, there are many ways that you can save
Hold off on major purchases – Inflation raises the price of everything, so now is not a great time
to buy a new car, entertainment systems, appliances, or furniture – unless if you absolutely
need to. Delay as many major purchases as possible and wait for prices to level out again.
There are multiple ways to save money and invest in your financial future – remember that tackling your
finances one step at a time is better than not doing anything at all. Whether it’s paying off debt or
putting more money into your emergency fund, you’re getting one step closer to your financial goals!
Bonus Tip – see if your mortgage payment needs to be re-evaluated. If you bought a home with less
than a 20% down payment, your monthly mortgage payment likely includes private mortgage insurance
(PMI), a policy that you pay for and that protects the lender in case of default. PMI can be canceled
once the amount you owe is less than or equal to 80% of the home’s original value – you need to
request this in writing.
If you don’t own a home just yet, but you are looking into becoming a first-time homebuyer, contact
Peoples Mortgage to find out more about how the loan process works, and how you can save money
while investing in your financial future by owning a home! At Peoples Mortgage, it’s ALL about the