By CAPT Scott C. Gibney, US Navy (Ret.) Co-owner Gibney Solutions LLC (College & Career)
Discussing a family’s budget is never at the top of the list of fun things to do! It is, however, an important component to ensuring a secure financial future. This is especially true in times of rising costs. Interestingly, although there has been an increase in prices—due to a myriad of reasons—spending by families continues to drive the economy. That is why it is important to focus less on national news stories and more on how your income and spending habits actually affect your overall budget.
As any example, workers throughout the country have been experiencing rising wages. This increase helps offset rising costs. Are Amazon boxes still arriving at your house everyday like they did during the pandemic when online shopping was one of the few activities?
It might be time to assess if reducing some purchases will help to alleviate some of the concerns around inflation. For many families, a few tweaks in their daily spending routines can result in less stress and better money management. Here are a few tips that are sure to make your financial future brighter.
Where does your money go?
Understanding how your income is used is the first step in getting control of your spending. Most families don’t take the time to review exactly how their hard-earned dollars are being spent. Instead of focusing on every penny, take a few minutes each month to isolate those necessary expenses—rent, food, heat, etc. The amount left over is your discretionary income. How is that money being spent? Can you make changes that will put you in a stronger financial situation?
Rethinking your spending habits
Many people think budgets restrict their ability to spend. The reality is that understanding your financial habits allows you to spend each dollar earned on experiences, or items, that you truly need or value. Do you really need four different streaming services? Is that expensive dinner more enjoyable than a romantic picnic in the park? Focusing on the value of each dollar spent is a great way to save money while getting the most out of your income.
Get started today!
Financial independence, saving for college, and early retirement are top reasons for families to actively engage in budgeting. During inflationary times, it is even more important to review your spending habits. Doing so will get you on the path to achieving your financial goals.