Inflation makes budgeting trickier than ever. Even with a steady paycheck, the rising cost of essentials like food and gas make it more challenging to pay bills on time and still have money for the everyday items we need.
One question you might be asking yourself is: “How can I continue to pay for the things I need when my paycheck isn’t growing, but my expenses are?”
In this post, we’ll give you some ideas on how you can make adjustments to your budget and stay afloat, even as costs continue to rise.
Define Your Priorities and Goals
Even when budgeting in “normal times,” many of us design our budgets by prioritizing our spending, saving, and giving around what’s important to us. Now, as the cost of goods increases, that same process of prioritizing can help us laser focus our budgets to work toward what’s most important.
So what’s most important to you? Of course, it’s important to make sure that you have space in your budget for essentials like rent, food, and transportation. Those are top priorities. But if you’re working on one or more money goals, you’ll need to decide exactly how important they are to you right now. Consider whether you have room for those goals given your income and how much you anticipate spending on essential items.
If you decide those goals aren’t as important right now, or that you don’t have space for them in your budget, bump them down the priority list until you’re able to work on them again.
Cut Expenses
Cutting expenses can also help you trim your budget to accommodate some of the higher prices that you might be seeing.
Here are some tips you can try to cut or reduce some expenses quickly. If you need to cut even more, go through your budget systematically and think of areas of spending that you don’t mind cutting or reducing (that’s called creating a lean version of your budget). You might even find that you’ve naturally been spending less in certain parts of your budget, and can redirect that extra money toward other critical areas of your budget.
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Need to make changes to your budget to account for inflation?
1 thought on “How To Rethink Your Budget As Inflation Rises”
I’ve been struggling with this so what we did was to adjust our budget according to the previous receipts we have (take the average $$). Biggest expense I’ve been wrangling with has been groceries. I’ve driven that down almost as far as it can go. Other than that, there really isn’t a whole heap for us to cut back on – as we’ve done those things already.