The only thing that is certain about our lives right now is that we live in uncertain times. Prices seem to be ever-increasing, supply chain issues have been making everyday items harder to find, and our traditional ways of saving money through our 401k and stock purchases can feel risky and unreliable.
But just because times seem a little more uncertain, does not mean that we need to live in a state of constant fear or worry. Instead, take this as an opportunity to prepare.
As with all things, the future may be unknowable – but taking a few strategic steps can help you become better situated to weather most financial difficulties that may come down the road
1. Create a basic budget
I know what you are going to say – everyone HATES to make and stick with a budget.
But hear me out …
In order to save money, you have to have some idea of where your money is going.
This will allow you to identify the “fluff” – and yes, there will be “fluff”.
What’s “fluff”?
Remember that time your kids wanted to watch Guardians of the Galaxy but you didn’t want to pay the $4.99 rental fee so you signed up for the 2-week free trial for Starz -> but then forgot to cancel?
Or that app you downloaded on your phone that you literally never use but you continue to pay $0.99 a month for -> just in case one day you might need it?
“Fluff”
And it adds up.
2. Now that you know where the “fluff” is, you can cut expenses.
Cancel subscriptions that you don’t use, consider switching to a cheaper cell phone plan (cut the landline if you have not already done so), really look at those monthly service charges and determine if they are worth keeping (i.e. multiple streaming services, gaming services, music streaming, mobile phone apps, monthly car wash memberships, monthly make-up subscription services, electronic book downloads, etc.).
Years ago, we had multiple makeup subscription services – and although the prices were reasonable individually – together they really started to add up.
This was one of the areas where we were easily able to cut back and start making an impact without really feeling it.
I’m not saying that you have to get rid of everything – but I would definitely consider looking at some alternative options.
After all, there are many comparable free or low-cost substitutes available for most online and downloadable services.
3. Reduce debt
It is easy to say.
But how do you really reduce debt when costs are skyrocketing?
Well, the truth is that it’s not easy – but unless you want that snowball of debt to get bigger, you have to try.
I understand that sometimes you need to use your credit cards just to get by – but in order to get your debt under control, you need to start somewhere.
Begin by putting away the card that has the highest interest rate.
It’s hurting you the most. You know it and I know it.
At least by using those cards with a lower interest rate you are minimizing the damage when you can.
Pay off as much as you can each month – and whatever you do, don’t be late on that payment. Most cards will have a clause in their contract allowing the credit card companies to automatically increase their interest rates if you have even one late payment.
As you begin cutting costs elsewhere, use the extra cash to pay off as much as possible towards your credit card balance and then put them away, one at a time. Once that card is put away, only use it for unexpected emergencies.
You know what I am talking about – flat tire situations, broken a/c, etc.
That feeling of satisfaction and freedom is indescribable.
Paying off your debt will allow you to safely begin a savings plan while giving you some added flexibility in your daily spending.
4. Reduce Cost.
Now it’s time to really cut back and find those simple solutions that help put some money back into our pockets.
Save on groceries – for many families, this is the biggest household expense after housing and utilities.
Buy in bulk when the discounted price is worth it – but only buy those items that you will actually eat or use.
You may save pennies buying a pallet of Mac & Cheese, but that doesn’t help you in the long run if your kids are lactose intolerant.
When buying in bulk, also take a few moments to make sure that you are actually getting a bargain. Many times, at first glance the price looks great – but once you divide the price by the actual quantity purchased, you realize that the individual packages may be cheaper.
Use coupon codes, coupon apps , and digital or paper coupons.
I know this might feel very time-consuming or outdated, but there are folks out there who manage to bring about large savings – sometimes even making some money – on their daily purchases.
With the potential to really bring down costs, it is worth it to take a few moments to plan your shopping trip.
As an additional tip – If you are unsure how to get started, there are many great “coupon experts” on Instagram and TikTok that really take you through the process and will even show you what stores have the best deals, what to buy, and what coupons to use. It’s a great starting point for new couponers.
Just make sure you are focusing on items that you actually use and need. It can be easy to get caught up in the savings and buy items that you might not really need.
Another great idea is to buy “generic” brands.
One of the most mind-blowing things that I learned while getting my MBA was that identical products were often manufactured in one plant and then labeled differently for various retailers.
That means that the same batteries, green beans, and diapers that are marketed as name brands are also sold under the labeling of generic retailers at a fraction of the price.
At the time of this article, Duracell and Kirkland batteries are the same product, Reynolds’s Wrap aluminum foil is the same product as many generic store brands, even without the fancy packaging and Tylenol is just acetaminophen with a higher price tag.
Many times you are paying extra for the packaging and marketing, not necessarily because the quality is better.
5. Finally, shop around.
With the cost of items continuing to increase, we should not be making mindless purchases. Our spending at this time should be intentional and calculated.
This helps better ensure that we are focusing on “needs versus wants” – and yes, it is ok to sometimes need leisure and fun activities. Those items can definitely be included in your budget.
But being intentional allows us to ensure that the necessities are covered first – and it allows us to plan accordingly and seek the best prices.
If you know what you will be purchasing, especially with big-ticket items, take the time to do a little research.
Seek out the sales, compare online costs (don’t forget to factor in shipping), negotiate when possible, and find store locations that include price-matching services.
This can ensure that you get the best possible price and can often result in hundreds of dollars in savings.
Of course, this list is by no means comprehensive – but it does provide a starting point to help get those costs under control.
These first steps can give you some added reassurance during these crazy times and position you to be in better control of your cash flow so that you can feel more secure and prepared to care for your home, your family, and your finances.