Saving and spending are always hot topics this time of year, as holiday shopping is in high gear and people start thinking about their 2022 budgets. This year is no different, with four in 10 (42%) of people in the Greater Philadelphia and Delaware region planning to save more to help ensure future financial stability, according to a recent WSFS Bank Money Trends survey.
As we navigate unsettled prices for gifts and everyday items over the holidays and into 2022, there are steps you can take now to stretch your budget, save more and prepare for a post-pandemic economy.
Mitigate Inflation’s Impact on Everyday Purchases
If rising prices are stretching your wallet thin, you are not alone. WSFS’ Money Trends survey found that more than one-quarter of respondents are concerned that higher everyday prices will eat into their savings.
Grocery prices are being impacted quite a bit by inflation, so prepare ahead and shop around for grocery items, not relying on one store to find the best prices for food and household items. Over the course of time, you’ve probably signed up to receive email rewards and coupons from not only grocery stores, but other retailers as well. Check your email for digital coupons, and don’t forget to check the coupons you receive in the mail. Some retailers are really rolling out the bargains this year to drive traffic to their stores.
The Money Trends survey also found that rising gas prices are changing how people shop, as they are trying to condense trips to save on gas. Even though you may not need to fill up every day, if you are able to condense everyday trips the savings will start adding up.
Take a hard look at your short-term finances to see where you can realistically cut back. Just like a food diet, extreme budgeting changes are not usually sustainable—your goal should be to build long-term financial habits. A budgeting app could be very useful to help recalibrate your finances and track spending and saving to achieve incremental goals.
Save Money by Cutting Out Unused Expenses
Take a close look at your subscriptions, such as streaming services. There are so many options these days and only so much time to watch them. Keep a log of what you are watching on each service for a week or two and see if there are any that simply don’t have content you are watching as often and are candidates to suspend for a while.
Meanwhile, other weekly and monthly expenses like food delivery services are very convenient but also add up over time. Perhaps reducing the number of meals per week or switching to a bi-weekly delivery schedule can help you stretch your food budget, while also putting some of your newly acquired cooking skills to a fun test by replicating some of your favorite past delivery recipes!
Once you’ve trimmed some of your extra expenses, set up automatic transfers of those unused funds each month to your savings account. It’s easy to find ways to spend newly “found” money but automating your savings can help avoid those pitfalls.
Be Mindful of Overspending
According to the Money Trends survey, 30% of respondents in the region plan to spend more money than they did last year for at-home holiday celebrations. With rising food prices, this may be a good time to keep the menu simple to avoid preparing too much food and throwing it away. If you’ve hosted holiday parties and family feasts in the past, you know how quickly the grocery bill can grow, so this year, focus more on simplicity to reduce waste and extra time in the kitchen while spending extra time with your family and friends.
Conduct a Year-End Financial Checkup
It’s always a good idea to have a grasp on your spending and saving habits, and the past couple years have seen drastic swings for many people. The Money Trends survey found that 60% of respondents used credit cards in the past 12 months, and that 65% used personal loans to pay their bills while more than half (52%) used other forms of credit, including credit cards, to pay bills.
This strategy can be beneficial if you are using a rewards credit card to pay recurring bills, like your subscriptions, each month as long as you are paying the credit card off or can keep up with other loans’ monthly payments. Be sure to incorporate your credit accounts into your spending and saving budget and goals.
Others who were surveyed by WSFS and received stimulus or child tax credit payments socked them away in savings. Twenty-three percent of regional respondents cited these payments as reasons they are saving more now than earlier in the pandemic. Now is also a good time to evaluate if these additional payments changed your spending habits. While stimulus payments were immensely helpful for many families, they can’t be counted on next year so make sure your 2022 spending and savings strategies are realistic and reflect your regular income sources.
While we don’t know what the future holds for additional savings opportunities like this, starting or building on savings is a great path toward better financial stability.
Finally, check with the professionals in your financial life for recommendations. Your banker, financial advisor and tax professionals can help you evaluate where your finances currently stand, their potential to grow, and how to get there.
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Read our financial resources from your friends at WSFS.