Building Your Budget During Inflation

Jessica Quindlen: [00:00:00] Welcome back to the Sound Cents Podcast. I'm Jessica Quindlen. Today we're discussing inflation, the super fun topic that we are all dealing with right now. I am joined by Emma Protsik, our Supervisor of Financial Coaching.

Hello, Emma.

Emma Protsik: Hi Jess.

Jessica Quindlen: And our Senior Manager of Community Impact, Bree Shellito. Hi Bree, how are you?

Bree Shellito: Hi, Jess.

Jessica Quindlen: Emma, let's get started right with you. What is inflation, right? We hear this word a lot. We're seeing the impacts, but what truly is it and how does it impact us?

Emma Protsik: Inflation can be simply defined as the sustained increase in the price of different goods and services. So, something we're probably all feeling a little bit in our budget now, but the impact it has on us is we simply can't buy as much as we previously could afford.

The value of the dollar is going down. Inflation can impact a lot of different areas of your life. Of course, just kind of our typical living day-to-day expenses. So, groceries, utilities, fuel prices are all going to be impacted by inflation. So, now's a perfect time to revisit your budget. Maybe start cutting out some non-essential purchases, maybe some subscriptions going on, eating [00:01:00] out, and then definitely taking advantage of any deals or rewards that you have.

Inflation can also get in the way of our different goals. So maybe we have some short-term savings we're working towards. Whether that's vacation or a different life event. With expenses costing more, then we probably have less to allocate towards our different savings goals.

So, our savings could be feeling a little bit and especially our emergency savings. So, if you had that established, you might have needed to start kind of tapping into that now. But if you have not already got an emergency savings started, now is the perfect time to start. A couple dollars, even if it's $5 a month here and there will make a huge difference.

Jessica Quindlen:

Alright, awesome. So Bree, what are some tips that can help us manage our finances during this time?

Bree Shellito: Emma was talking about savings, which is huge at any point, especially emergency savings. That can even be emergencies right now with not knowing what inflation's going to do.

Jessica Quindlen: Right.

Bree Shellito: If it's going to go up more and your budget cannot account for how much more you're spending in a certain area, you can pull from that in case you need to. I mentioned budget. If you don't already have [00:02:00] one, we would absolutely recommend looking at that, having an idea of where your money's going, so that you can kind of see what areas have gone up and where you need to readjust because all of us need to readjust.

Food’s costing more, costs of even utilities, good services. It’s all gone up. Unfortunately, unless your pay has gone up, which is great then you're going to have to readjust what categories and what you're spending where. So definitely just starting there. Having an idea of just what your financial strategy is, not just when it comes to your savings, which is great.

Thanks for mentioning that, Emma, but just your spending overall. Where, where are your values? What do you value? What do you wanna spend your money on? To determine which categories need a little more and which can maybe take a little less.

Jessica Quindlen: I love that. Yes. And I think it's so important. You know, we, we can't control inflation.

We have no control over this, but we can control, you know, how we deal with it and how we respond. This is all fantastic.

Bree Shellito: Absolutely.

Jessica Quindlen: Emma, I'm coming back to you. What are some ways that we can save on our everyday spending as we're in this inflation time?

Emma Protsik: The first step I have for you is try to switch it [00:03:00] up. Humans, I think I've said a couple times on this podcast, but we are creatures of habit. So, you get used to where you shop and where you get that gas. Now is a perfect time to explore if there are more cost-effective options. So, it might be going to different grocery stores, different gas stations.

Just doing a little bit of research around that to see where you can get the best deals and what makes sense for what you're looking for. We talked a little bit about food. I know groceries are a huge one that we're all feeling right now. We actually do have a podcast all about that, so please definitely check that out.

But just, again, it's all about setting budgets for the different expenses we have. Just being a little bit disciplined, looking at those numbers, like Bree mentioned, just getting that budget in place and sticking to it. Coupons and loyalty programs are another kind of creative way. I guess we can work towards combating inflation. So, couponing is cool. We can save a lot of money that way.

Jessica Quindlen: We need to put that on a t-shirt. Couponing is cool.

Emma Protsik: In addition to like loyalty programs, are you signed up for your grocery store's loyalty program? And that way you can get some [00:04:00] extra discounts. Even some cash back there. And then when we are thinking of shopping, even if we're doing that online, there are some ways to make sure that we're making smart decisions around those purchases.

We were actually talking before this podcast about the browser add-ons. So, Honey, and then Jess was telling me all about Capital One Shopping, which is super cool. But those browser extensions can actually compare prices for online goods across multiple platforms. They'll let you know where it's the least expensive. It'll let you know kind of those trends overall.

Bree Shellito: Emma, you told me about Honey before, and I think you had said that there's like an area for a promo code. It'll find different promo codes for you.

Emma Protsik: Oh yes. I love Honey. It'll search, it'll try out all these different coupon codes it found online. If you've ever tried to Google, you know, “specific store coupon codes”, 90% of them don't work. But Honey will try them for you and then get a little discount there.

Bree Shellito: Awesome. Find the one that works?

Emma Protsik: Yep.

Bree Shellito: Yeah, that's cool.

Jessica Quindlen: All right, I need to download that this evening.

Emma Protsik: In addition to that too, I think [00:05:00] cash back programs. So, if you have a credit card you like to use, it’s a really good time to take a look into that and remind yourself about those different rewards that you have.

So, does one of your credit cards offer a higher percentage cash back for gas? Make sure you're using that for gas, same for groceries, or any other expenses there.

Jessica Quindlen: Great. I love that. So really kind of taking some time, doing the research on what you already have and making the most of your money.

Emma Protsik: Exactly.

Bree Shellito: The other thing I know we've talked about this before, Emma, but the idea that adults kind of want to just be adults sometimes. I totally understand you wanting to have your phone bill in your name and all the things, but if you do have trusted people in your life, family members, trusted friends, consider bundling services.

Cell phones, we see at almost every carrier, it's less expensive. The more phones that you have, you can save a lot of money if you agree on which services that you're going to bundle. Who's going to pay for what? Even subscription services. There are subscription services that allow for more than one user, and there are some that don't.

But you do your thing. But who's going to pay for which? Right? Netflix, Disney+. [00:06:00] having their own, it's costly. It adds up. And so, thinking about how you can share with your friends and family, what makes sense, and just bundling those together, whether it be your cell phone or subscription services.

Spotify, if there's multiple users, sometimes multiple users is only $12.99 versus the single user at $9.99. So instead of you each paying $10, split the $12 and pay six, and it may be a small amount at first to save, but it'll add up.

Jessica Quindlen: Yeah, absolutely. Especially over months with those subscription things. You know, it seems small in the moment, but yeah, they add up quite quickly.

Emma Protsik: I'm sure your family members will be happy. You brought that up too. Like Jess was mentioning, we're all feeling this right now, so.

Jessica Quindlen: No, I love that. So, I'm not going to lie, right? I enjoy shopping. Fun fact about Jessica. But of course, during this time saving is very important as we've discussed, but there are those moments where you, you want to splurge either for yourself or for your child or a friend or something. When should I save and when should I splurge?

Because I do think that putting those boundaries on like [00:07:00] never shop is almost when people maybe go crazy or something, you know? So, what are some tips around that?

Bree Shellito: Yeah, it's a great question. Having an idea and just knowing yourself, Jess, like what are the most frequent places that you shop?

What are you most frequently shopping for? Is it clothes, is it electronics?

Jessica Quindlen: Shoes.

Bree Shellito: Knowing that about yourself. Holding back, but especially knowing when there's a great deal at a retailer that you shop at frequently and you know that you've been eyeing that pair of shoes for some time. Kind of wait for a sale if you can.

Jessica Quindlen: Yeah, yeah, yeah. It's great. No, I love that.

Bree Shellito: As soon as it's on sale, splurge, go for it. Don't hold back. You're exactly right. I think sometimes when we're buying things at full price, that's when it can get hard.

And just thinking for the future, right? Are you going to have maybe some job interviews coming up? Are you going to have a big wedding in the, in the summertime, fall time? What do you need? Start thinking about it now because then when those sales come up, you can save right? Versus waiting until the last minute, which I understand is a personality trait for some. If you think about what you're going to [00:08:00] need, then you can keep an eye on when something's going to be on sale.

And even when it comes to things like electronics, I'll use a cell phone as an example. I have this theory that a cell phone is only going to work for about two, three years and then it just seems like it goes out. Are you agreeing?

Jessica Quindlen: Oh yeah. Absolutely. Yes.

Bree Shellito: It also probably depends on what the one you buy initially. If you buy some of the ones that are the higher price initially, it's going to last a little bit longer.

Jessica Quindlen: No, for sure. There's that, you know, get you get what you pay for in general.

Bree Shellito: Exactly. And that can truly be true at times, especially when it comes to electronics. And so, if it's something that you're going to use frequently, spending the money up front instead of buying multiple pairs of shoes is actually kind of a big one there, Jess.

I tend to buy some more inexpensive shoes. Costco. Hello. Love the Costco tennis shoes. They don't last very long, right? And I'm not saying that they aren't the same shoes that are out there, but if I had bought a pair of tennis shoes for more than $25, it might have lasted me more than two months.

But instead, I'll buy a $25 pair every two months. That's going to add up, right? Instead of buying one. So, [00:09:00] not the poster child for it by any means but making sure that you're knowing what the cost of goods are. Keeping an eye on those sales, knowing where you shop.

Emma talked about rewards points. Make sure you're signed up for the emails for the retailers that you use frequently. They can be tempting, but that's how you're going to know when the best sales are coming up.

Jessica Quindlen: No, I love that. That's fantastic. So, Emma, we're shopping, we're saving, we're doing all the things right, but our debt is still there, whether we like it or not.

It may be credit card debt; it might be different kinds of debt. It doesn't matter. What are some ways that I can tackle my debt while I'm doing all of these other things during inflation.

Emma Protsik: Yeah, absolutely. I mean, debt is crazy stressful. We know that. And especially during times like this, when everything else is getting more expensive.

The first thing that you really need to do, again, kind of going back to that initial budget, we need to figure out if you can make those minimum payments, right? So that is the number one priority. The biggest part of our credit score is that payment history. So, get that plan in place. If you are seeing a deficit, so maybe with how much other expenses [00:10:00] increase you're not able to make those payments, then that's when we need to look at maybe minimizing spending.

So, okay. We really want to work on cutting down our expenses. What I recommend is just going line item by line item in your budget. Lay out all of your expenses, look at each individual one, and really evaluate if that's something that you need. If it's something you can cut out completely or maybe find a more cost-effective alternative.

Bree Shellito: Emma, we talk a lot about values too, when we're talking about spending and savings. Maybe just a reassessment of that. Maybe your values, you had a fair number of them before, but thinking about those now.

Emma Protsik: If you're having a hard time cutting out expenses, I really recommend putting them in a list and ranking them. Maybe pick 10 and the ones that don't make the list are ones you can cut out or again, reevaluate.

Because again, we want to still enjoy the things. We want to do fun stuff. We want a realistic budget that includes those fun splurges. But especially if we're tackling something like debt, we want to make sure we get those minimum payments.

And in addition to cutting those expenses, you can always look at ways to increase [00:11:00] income. I know getting a second job doesn't sound super attractive, but there's other options out there. So, are there things that you can sell to maybe put a little bit more towards that debt? Maybe even add it to the principal and get it paid down sooner.

Even things just like dog sitting. I know we talked about that on one of our podcasts already, but just try to increase that income. Because again, number one priority is just making those minimum payments on debt.

Another thing too that we often forget about when we're looking at credit cards, is if you've had that credit card for a good amount of years and you’re a loyal customer, all of that. Call them and see if they can lower that interest rate. If it's a card you're carrying a balance on. It's very likely that they'll do what they can to kind of help you out, but that's still an option for our debt.

Too, if you're just very overwhelmed with it, you are not alone in this. There's plenty of resources. Ent does offer free financial coaching available at no cost to both our members and non-members. Our financial coaches will sit down with you, look at your personal situation, and help you get an action plan in place to take care of debt, [00:12:00] to make sure you're still saving, and again, be able to have some money left over for the things that you love.

Jessica Quindlen: That's fantastic. And we'll put a link in the show notes for our wonderful financial coaches.

Well, that brings us to the end of our show. Emma, Bree, thanks so much for being here. It was great to have you.

Emma Protsik: Thanks, Jess.

Bree Shellito: Thanks.

Jessica Quindlen: Thank you for listening to Sound Cents from Ent Credit Union. Be sure to follow our podcast as well as rate and review us. I'm Jessica Quindlen. I will see you next week. Same time, same place.