By Julie Jaggernath
It’s hard not to notice the rising cost of living. Most obvious these days is the price at the pump, and as businesses pay extra costs for the delivery of goods and services, consumers will face fuel surcharges and even sticker price shock. You’ll need to make some choices to avoid running up credit card bills to supplement your lifestyle because higher expenses ultimately contribute to the overall cost of running your household.
Whether you’re budgeting for a single person or a family, here are some tips and choices to consider so that your lifestyle remains affordable:
Develop New Money Management Habits
The way we manage our money becomes a habit; how we spend, what we buy, if we have a budget outlined for ourselves – these are all habits we develop, and habits are hard to break. If you really want to make changes, you need to make a clean break with conscious choices and alternatives to keep yourself from falling back into your old habits.
For instance, if you spend $10 on lunch every workday, what do you need to do differently ahead of time so that you’re not tempted to spend that $10? It might mean meal planning your dinners better so that you’ve got leftovers to take for lunch. Or maybe you need to stock the fridge with creative sandwich-making items. If you’re short on ideas, hit the blogosphere for creative brown-bag solutions. It might also mean dedicating a little time each evening or in the morning before work so that you’ve got time to pack a lunch at least 4 days a week.
Sweat the Small Stuff, It Adds Up to Big Stuff!
Spending $10 for lunch four days a week adds up to over $170 a month. That’s over $2,000 a year! Sweat the small stuff when it comes to budgeting because it’s easier to make small changes than big ones.
How Much Do Others Spend on Living Expenses? (Our Calculator Will Tell You)
How Much Can You Save on Your Utility and Household Bills?
Take a critical look at all of your utility and household bills. Consider if your needs have changed and how you might be able to take advantage of savings programs the companies offer now, that they didn’t have when you signed up originally. Be sure to take a good look at your cell phone usage. A cheaper plan might be available to you, or you might be able to drastically downgrade your data portion. A lot of people use wireless internet at work and at home, so saving on data has become easier. Call up all of your service providers and see if you qualify for any loyalty discounts or new pricing plans. Saving even $10 a month comes to $120 a year, which can be spent elsewhere or saved all together.
Is Saving an All or Nothing Game?
Cutting big expenses from your budget is harder than you think. Drastic all-or-nothing changes are hard to stick with for the long haul so start by making small changes that will add up over time. Put every single expense you have (yes, all of them!) on the chopping block with the aim of saving 10% – 50% right now. Don’t aim for 100% – that’s totally unrealistic for most expenses. If you have no idea where you’re actually spending your money, keep track for a few weeks. Use what you learn about your spending habits to fine-tune your budget.
Being Frugal is Not the Same as Being Cheap
Frugal is different than cheap, and when you’re looking to preserve your overall well-being with a sound money management plan, it’s easy to remember why you’re making frugal choices. Will it be easy all the time? Definitely not. If you have friends who tend to spend whenever you’re together, limit the time you spend with them or find other ways to spend time with those friends. You might also want to start looking for friends who are more aligned with your values. Don’t be afraid to say that you must consult your budget before committing to an event or evening out. Money isn’t typically a topic of discussion, but when living costs rise for everyone, being a little cheap is the new frugally cool.
Increase Your Income, Decrease Your Expenses
There are countless ways to save or generate more income. The best strategy to afford your lifestyle when the cost of living rises is likely a blend of the two because it’s a less drastic remedy. Ideas include giving up your vehicle if you don’t truly need it, taking in a roommate, moving to a less expensive neighbourhood or town, working extra shifts or a second job, saving on groceries, claiming any government benefits you might be entitled to, or submitting receipts for reimbursement to a workplace extended health benefits plan.
Also, consider how much interest you are paying on any debts you may have. If you have a lot of debt, find a debt repayment method that works for you and start paying off what you owe while interest rates are still low.
Solutions for the High Cost of Living
We have a lot more flexibility today than generations in the past to do what works for our lifestyle and financial goals. While change and breaking habits are never easy, this flexibility allows us the room we need to find solutions to the high cost of living that we can live with. To make wading through the sea of more choices and options a little easier, arm yourself with information. Increase your level of financial literacy so that you can make informed decisions. If you’re not sure where to start or have questions you can’t find answers to, we can help – contact us by email, phone 1-888-527-8999, or online chat. With a little creativity and a healthy dose of chutzpah, you’ll be the envy of your friends and family as you reach your goals despite the challenges that come from the rising cost of living!