Inflation has surged in unexpected places over the past several years. As a result, many formerly comfortable families are weighing whether they should buy the things they have always enjoyed. If that sounds familiar, try using these tips to stretch your spending dollars and create some breathing room.
- Rethink Vacation and Travel Plans
A luxurious vacation may sound like a dream come true, but right now might not be the best time to indulge. If you struggle to find extra money for everyday splurges, a big one could tip the scales on your finances. However, that doesn’t mean you can’t travel and relax.
Instead, try toning down your vision of the perfect vacation. Start by identifying exactly what you want to achieve in a trip (adventure, sightseeing, relaxation, etc.) and what appeals most to you about that dream destination. Then, look for lower-cost alternatives that provide the same benefits. Finally, start planning to save for the bigger trip later on or when a sale comes around.
- Know What You Can Spend on Big Purchases
Jumping into a major purchase without exploring how it will impact your budget can lead to serious financial strain. Unfortunately, many individuals who purchased homes during the real estate boom learned this the hard way. With interest rates and prices both rising during times of inflation, what seemed manageable a few months ago can quickly move out of reach.
One effective strategy to combat this is to know exactly what you can spend on a major purchase ahead of time. Then, use that number to explore what it will buy you. Online tools can be incredibly helpful in this task. For example, you can use an auto loan calculator to see exactly what a set payment will buy each month at different internet rates.
- Pause Subscriptions
This is an area that can quickly dry up discretionary dollars without drawing much attention. Take a look at bank and credit card statements and identify all of your recurring charges. Now, ask yourself how many of those are for things you use every day. There’s a good chance that you signed up for some of those and thought, “I’ll cancel it before the free trial ends,” only to forget. Now, you are being charged every month or year for a service you don’t use.
Canceling those unused subscriptions can easily add some breathing room to your discretionary spending. Plus, unlike plans to skip your favorite streaming service, you probably won’t miss most of these. After all, you might not even realize you are paying for them unless you scour your statements each month.
- Check Your Bank Statements
That leads to another area where you might want to pay a little more attention: your bank and credit card statements. If you tend to pay them each month without looking into the charges, then you could be missing important details that can save you money. Here are a few of the most common culprits:
- False and duplicate charges frequently show up on statements and should be addressed immediately to have them removed.
- Bank fees, such as overage or late payment charges can eat away at balances.
- Interest rate increases or changes to how interest is calculated can mean you aren’t even paying the interest on balances.
If you notice any of these, contact your bank right away and investigate them further. Ask if charges can be reversed or interest rates frozen. The worst a bank can tell you is “no.”
- Reevaluate Service Providers
You don’t have to do without your customary things because costs are rising. However, you might want to find less expensive alternatives for some basics. Shop around for lower rates on services such as car insurance, cell plans, and internet providers. If you find a better rate for the same service, ask your current provider if they will price match. If not, consider moving to the new company to take advantage of the savings.
Making small changes can help you maintain discretionary spending despite higher prices on everyday items. This may require some planning, but the effort will pay off in bigger savings.