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    Financial Moves to Make When Life Gets Expensive

    Chris Gottschalk

    Chris Gottschalk About The Author

    Jul 21, 2022 4:45:00 AM

    If you’ve been feeling like your paycheck doesn’t quite cover what it used to, you’re probably right. Thanks to inflation, you’re paying a little under 10% more than you’d pay for most things, and due to Russia’s actions in Ukraine the price of gas has skyrocketed. The end result is that most people are starting to feel like the cost of living has gotten expensive, and they’re starting to worry about how much longer they’ll be able to cover day to day expenses with their existing paychecks.

    The bad news is that higher prices are here to stay, at least for the time being. However, you don’t have to simply sit back and hope that your income can handle the price increases. You can take some steps that will help you reduce the financial stress of day to day living, and you might just improve your financial situation in the process.

    Adjust Your Budget

    The worst thing about everything getting more expensive is that it leaves you feeling out of control of your finances. Very few things are more stressful than trying to figure out if your paycheck can still cover your day to day living expenses. Fortunately, all you have to do to get back into control of your finances is adjust your monthly budget.

    Couple reviewing their budgetThe first step in adjusting your monthly budget is to go through it and see how much money you’ve allotted to each category. Then, look back over your past one to two months of payments in your online banking platform to see if you’ve overspent in any category. If you’ve stayed within the limits you set for your budget categories, take a second to pat yourself on the back.

    If you have overspent in any categories, though, you’ll need to figure out where you’ve overspent and by how much. You’ll also need to determine whether you’ll overspend on this category in the future. If you overshot your coffee budget, for instance, you’ll probably be able to avoid that cost in the future, but if you’ve overspent on gasoline you’ll probably have to increase your gas budget going forward.

    Now that you know what budget items need to be increased, you’ll have to think about where you’ll get the money for them. You can start by looking at budget categories in which you usually don’t spend all the money you’ve allotted and drawing from there. If you aren’t spending a lot of money in your clothing budget, for instance, you might want to reduce the money you put in there and use it for other budget categories.

    Adjusting your budget isn’t a cure-all. It won’t bring in more money, and it won’t make items more affordable. What it will do, though, is give you the peace of mind that comes from knowing you can cover all your bills each month, and help you figure out the best ways to use the money you have left.

    Life getting expensive? Create your new budget today! 

    Free Budget WorksheetReduce Your Costs

    Once you know where you stand financially, you can search for ways to reduce your cost of living. This is the point where a lot of well-intentioned but misguided articles will inform you that what you really need to do is stop drinking Starbucks and eating avocado toast. Admittedly, part of cutting costs may mean reducing how much you spend on luxury items, but the idea that you can improve your financial standing by abandoning things that make you happy is kind of ridiculous.

    A much better way to reduce costs is by looking through your budget and see if you’re paying money on anything you’re not really using. If you have a subscription to Netflix, Hulu, Disney Plus, HBO Max and Paramount Plus, for instance, think about whether you need all those subscriptions at the same time. You can probably get away with subscribing to one or two services a month.

    Another good way to reduce costs is to pay off outstanding debts. This will free up the money you spend each month making payments, and it will also stop you having to pay interest on the money you owe. Throw any extra money you have at your debts, and if you have multiple debts you can also reduce your costs by taking out a debt consolidation loan.

    Couple cooking togetherFinally, take time to prepare your own meals. Admittedly, making your own food takes more effort than going to a restaurant, but it offers a ton of benefits. The most obvious benefit is that you’ll save money by not paying anyone to make your food for you.

    However, making your own meals can also lower your grocery bill. When you plan out what you’re going to be eating for, say a week, you’ll more inclined to stick to the grocery list you create and less likely to make impulse buys. You can also save money by making dishes with similar ingredients, and you can use the leftovers as lunch or dinner in the near future, which will save you even more money.

    Take your first step to becoming debt freeGet Organized

    Make More Money

    Let’s be fair, this is easier said than done, and it’s easy to get cynical about any article that encourages people to make more money without at least acknowledging that if making more money was easier, everyone would be doing it. Still, there are some steps you can take to try to get some more money coming in.

    Woman working on side hustleA lot of people are turning to side hustles to bring in more cash, jobs that can entail anything from being an Uber driver to setting up their own Etsy shop. If you are going to look for a side hustle, do your research first. Think about what type of job you’d like doing and how much time you’ll actually have in your schedule to do it. You’ll also want to consider what you’ll need to do to get started on your second job, and most importantly what you can reasonably expect to make.

    Of course, instead of getting a side hustle, you could try to find a better job. Studies have shown that people who get jobs end up making significantly more money than people who stay in the same company for most of their careers. It’s at least worth looking around to see if other companies are hiring someone with your skillset and finding out how much their employees earn.

    Keep Life Affordable With First Alliance Credit Union

    When life gets expensive it’s understandable to feel frustrated and worried about whether you’ll be able to cover your living expenses. However, you can make moves to protect yourself against rising costs. Make sure your budget is up to date and that you can cover all your necessary bills first. Then look for ways to save money by paying down debts and get rid of services you’re not using, like subscriptions.

    You can also take advantage of the products and services First Alliance Credit Union offers to help stabilize your finances. Use the My Money tool in our online banking system to help you figure out where you’ve been spending money, take out a debt consolidation loan to make paying debts easier, or just keep money in our traditional savings in case of an emergency.

    If life is getting expensive, become a First Alliance member! Get Started

    We do our best to provide helpful information but we cannot guarantee the accuracy or completeness of the information presented in the article, under no circumstance does the information provided constitute legal advice. You are responsible for independently verifying the information if you intend to use it in any way. Additionally, the content is not intended to be reflective of First Alliance Credit Union’s products or services, for accurate and complete details about our product and service information you must speak to an advisor at First Alliance Credit Union.