Urban Wealth Management
Budgeting is a pivotal component of personal finance, but doing so becomes incredibly difficult during inflationary times. This is due to the fact that when inflation is high, the cost of consumer goods can become very volatile. For instance, you might not expect the cost of eggs to increase by nearly 40% in just one year.
Unfortunately, to account for these increases in cost, many people have to cut back in other areas of their lives. If you’re facing this situation, we’ve prepared a list of some of the best ways to budget during inflationary times.
The first thing that you should do when you’re making room in your budget for inflation is taking a look at your housing costs. Oftentimes, housing is the largest expenditure in people’s budgets (aside from taxes), so this makes it an easy place to cut back. Some things you can do to cut back/offset your housing costs are:
- Shopping for different homeowners/renters insurance
- Downsizing to a smaller house/apartment
- Getting a roommate/renting out a room
- Renting out your garage/parking space
All of the above things can help offset your housing costs by hundreds of dollars per month. This translates to money in your pocket that can be spent on other things, or saved!
Paying off high-interest debt is always a great idea whether we’re in inflationary times or not. High-interest debt eats away at your hard-earned money each and every day, so paying it off as soon as possible will help free up some money in your budget!
Don’t believe us? Here’s an example:
Let’s say that you spend $1,000 on a credit card with a 25% interest rate, and only make the minimum payment for a year. During that year, your loan would have accumulated about $250 in interest, which is a hefty chunk of money that can be put to better use elsewhere.
Everyone has a few subscriptions that they constantly forget to cancel. Unfortunately, though, the cost of those subscriptions can add up very quickly. While $10 per month might not seem like much, if you’ve got three unused subscriptions, that’s $360 (assuming they’re only $10/month each). Canceling unused or underutilized subscriptions can be a great way to free up hundreds of dollars in your budget per year.
Although trying to save money is always a financially sound decision, there’s only so much money that can be saved. Sometimes, there comes a point where just trying to save money won’t cut it - you also need to make more money.
Fortunately for you though, making additional money is easier now than ever. There are countless ways to make money via the internet, from freelancing sites to food/grocery delivery apps and rideshare - you’re bound to find a side hustle that works for you!
Whether you’re trying to run a tighter ship or plan for retirement, Urban Wealth Management can help. We have over a decade of experience helping people in Southern California manage their finances!
If you’d like to learn more about the services we offer, schedule a complimentary 30-minute consultation with one of our representatives by giving us a call at 424-277-2260 or visiting our website today!