February 2, 20232023 Financial Check-Up: Tips to Fight Inflation
Creating and maintaining a budget is one of the best ways to achieve your financial goals. However, even the most dedicated can find it challenging at times. That’s why it’s essential to revisit your budget and financial plan every six months. This financial check-up is your opportunity to get back on track before you stray too far from your goals.
A regular financial check-up is even more crucial today as inflation continues to decrease the value of your money. With less money to spend, it’s important to find ways to maximize your hard-earned dollars.
Consider the following inflation-fighting strategies when performing your financial review.
Keep On Saving
It’s hard to save money or keep your saving at your current level when your spending power is declining due to inflation. As prices rise, your same expenses require more of your money. While you should aim to keep saving money each month, if it’s difficult, try decreasing the amount you save temporarily. If you save 15% of your take-home pay monthly, drop it to 12% or even 10%. Only reduce what is necessary and try to make the reduction short-term, if possible.
Adjust Your Budget
When you’re spending more and saving less due to inflation, it’s always a good idea to adjust your budget. Look for obvious areas to cut back on, such as entertainment and dining out. Then try to uncover other savings opportunities. While many companies are raising prices, others realize their customers are struggling and are offering discounts and lower-tier options.
Get a Better Credit Card:
Most credit cards today have variable interest rates. This means the interest rate will fluctuate with the economy. As the Federal Reserve continues to raise rates to fight inflation, credit cardholders are noticing their interest rates jumping as well.
Fighting inflation as a consumer means making the most of every dollar. That includes decreasing the amount you pay in interest on credit cards. If your interest rates were already high on credit cards, they’re even higher now. Most rewards cards carry higher interest rates. Instead, focus on finding a lower-rate credit card – especially if you cannot repay the balance in full each month.
PEFCU offers a low, fixed 9.9 APR on the PEFCU Visa® Credit Card—and the rate NEVER changes or expires! Plus, you earn points to redeem for valuable rewards with every purchase. Apply here today!
Revisit Your Investments
Increased market volatility has many investors on edge. If you haven’t already, now is the time to schedule a meeting with your financial advisor. If you’re nearing retirement, your emotions are probably running high as most investors are taking significant losses right now. Switching to more conservative investment opportunities might be a good strategy.
On the other hand, if retirement is decades away for you, it might be an ample opportunity to increase your investments. Many people equate sudden market drops to buying stocks on sale.
Regardless of your age and financial goals, speaking with your financial advisor first is always wise. Making sudden decisions during periods of high market fluctuations could jeopardize your savings or cost you more in taxes.
PEFCU offers several investment products, including traditional and Roth IRAs, Money Market Accounts, Coverdell savings accounts, and more! Learn more here.
Maximize Your Grocery Budget
Review these tips before your next trip to the grocery store:
- Consider Publix store-brand food items and generic brand medications.
- Sign up for Club Publix Rewards.
- Take advantage of Publix BOGO items.
- Prevent overspending by making a list before you shop.
- Leave the kids at home.
Sell to Buy
Make a habit of selling unused or old items before you buy new ones. Find old clothes you or the kids never wear or are too small – and sell them online or at local consignment shops. Then use those funds to buy new items.
You can do the same with kids’ toys. That is, sell an old toy before buying a new one. Check out Facebook Marketplace and Craigslist to sell used items online. You may even consider buying used items yourself if you want to make your budget go even further.
Prepare for the Holidays
While the holidays are still way off, they’ll be here before you know it. Unfortunately, rising prices will only make the season more stressful. Planning now is the best way to save money and reduce holiday spending.
Prices tend to rise before the holidays in general – then stores offer discounts to boost sales. With prices already jumping, it’s wise to begin your shopping now. If you typically travel over the holidays, consider purchasing tickets earlier this year to lock in better prices. Any preparations you can make now to save money will help keep the holidays merry.
We recommend opening a Holiday Club Savings Account with PEFCU. It’ll help you save throughout the year, and your balance will automatically roll over into your savings account on November 1, each year. Learn more here.
We’re Here to Help!
Everyone feels the effects of inflation. Adjusting your budget and finding ways to maximize your hard-earned dollars are essential. That may include locking in a lower-rate credit card, refinancing loans at lower interest rates, consolidating debt, or opening a holiday savings account.
If you’re performing a six-month financial check-up and are interested in these services or have questions, we’re here to help. Please stop by any of our convenient branch locations or call 800-226-6673 today.
Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.