Author: Libby Morsheimer

Budget, Parachute Services

Budget Strategies During Times of Inflation

During times of rising inflation, here are some budget strategies you can use to help stay financially sound. 

Track Your Expenses and Spending Habits:

  • Know How Much You are Spending and Where It is Going: Before you can make any helpful adjustments, you need a clear picture of your spending habits. Track your income and expenses for a month using a budgeting app, spreadsheet, or even pen and paper. Research budget apps at https://www.nerdwallet.com/article/finance/best-budget-apps. Be honest with yourself about what it is you truly need and what you want. Be real about this for maximum effect. Needs reflect those things we need to survive like food, clothing, medical care and shelter. It’s a matter of degree!  For example, we all need to eat, but we can choose prepared meals at home based off of a grocery list versus eating out at a restaurant several times a week. Wants can often wait for future paychecks. 

Cut Back on Variable Spending:

  • Identify Areas to Trim: Once you see where your money goes, pinpoint areas where you can cut back and eliminate those pesky budget leaks!  Think for a moment of leaking pipe under your sink.  After you place a bucket there for (even a small) leak, and come back 3 days later, you will find that bucket is nearly full of water and heavy. It’s the same impact on our budget with the dollars flowing out. Our leaks can include regularly dining out, hidden fees, entertainment subscriptions, impulse purchases or our small daily habits that add up quickly. It also is eye opening to run the numbers and see what we are actually spending.
  • Embrace Frugal Fun: Find free or low-cost alternatives for entertainment. Explore local parks, plays or shows at high schools or colleges, museums with free admission days, or board game nights with friends. As the weather gets warmer, there are often many outdoor, low cost events. 

Stretch Your Groceries:

  • Plan Your Meals: Plan meals around what’s on sale and utilize coupons. This reduces impulse purchases and food waste. This is an area where most people say they can greatly tighten their budget and boost savings to “pay themselves”. 
  • Consider Generic Brands: Store brand staples are often just as good as name brands at a fraction of the cost. Shop at discount grocery stores in your area such as Price Rite or Aldi. Even check out dollar stores for staple items.
  • Embrace Meatless Meals: Meat can be a significant expense. Try incorporating more vegetarian meals into your diet. Identify more high protein items like peanut butter, legumes, and tofu and eggs when reasonably priced. Stock up when these items are on sale.

Be Strategic with Debt:

  • Focus First on High-Interest Debt: Focus on paying down credit card debt first, as high interest rates can quickly increase the cost of borrowing. Start with those credit cards with the highest interest rates first. Know that you can contact your creditors if you are having trouble making minimum payments. They may be able to work with you to temporarily lower your interest or your payment amount to help you catch up. The sooner you address, the more you save.
  • Explore Balance Transfers: If you have good credit, consider a balance transfer card with a 0% introductory APR to temporarily reduce your interest charges. Be disciplined and use the new card for balance transfers only and pay it down before the introductory rate ends. This is critical!  

Boost Your Income (if possible):

  • Explore Side Hustles: Look for ways to generate extra income, like freelancing, online gigs, selling unused or unwanted items, making deliveries, etc. Check out https://www.bankrate.com/investing/passive-income-ideas. Also, if inflation is eroding your purchasing power, consider having a conversation with your employer about a raise or extra hours to keep your salary competitive. Use that extra money to pay off debt or build savings, even very small amounts of savings matter in the long run.

Additional Tips:

Shop Around for Better Deals: Compare prices on everything from groceries to insurance to ensure you’re getting the best value. This helps you avoid impulse buying if you prioritize your research

Review Subscriptions: Audit your monthly subscriptions and streaming services and cancel any you don’t use regularly even if you need to do this temporarily. 

Utilize Cash: Using cash for everyday purchases can help you stay more mindful of your spending. Multiple studies show that we spend less when using cash instead of a credit or debit card. When you do use cash, save all that change.   

Research Ways to Lower Utility Costs:

Adjust Your Thermostat: A programmable thermostat allows you to adjust temperatures when you’re away or sleeping. Lowering your thermostat in winter and raising it in summer can significantly reduce energy use.

Unplug Unused Electronics: Even electronics in standby mode draw a small amount of power. Unplug chargers and devices often not in use to eliminate “vampire energy drain.”

Wash Clothes Smarter: Wash clothes in cold water whenever possible and air-dry laundry when weather permits.

Shorten Showers: Every minute counts. Reducing shower time can significantly lower hot water usage and lower water heater temperature: Most water heaters are set too high. Adjust the thermostat to 120°F (49°C) to save energy without sacrificing comfort. Some folks actually set a timer!

Fix Leaks: A leaky faucet or dripping showerhead can waste a lot of water, energy and money. Repair leaky fixtures promptly.

Switch to LEDs: LED lightbulbs use significantly less energy than traditional incandescent bulbs and last much longer.

Embrace Natural Light: Open curtains and blinds during the day to maximize natural light and reduce reliance on electric light.

Consider Alternative Billing Options: Some utility companies offer time-of-day billing where rates fluctuate throughout the day. This can be advantageous if you can shift energy usage to off-peak hours for things like running a dish washer and washer/dryer.

By implementing these strategies, you can tighten your budget and make your money stretch further during times of high inflation.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Budget, Debt, Parachute Services

Creative Ways To Easily Save

Saving money doesn’t have to be boring and routine! Here are some creative ways to easily boost your savings and get closer to those money goals!

The “No Spend” Challenge:

How it works: Choose a specific period (a weekend, a week, a month, or even longer) where you commit to not spending any money on non-essential items. This means you have to be very honest about what is a “need” versus a “want”. It also means no impulse buys, no dining out, and sticking to only necessary expenses like groceries and bills.  

Why it works: This challenge makes you more aware of your spending habits and helps you identify areas where you can cut back (i.e., where your budget leaks are). It can also be a fun way to test your creativity in finding free or low-cost alternatives for entertainment and activities.  

2. The “Spare Change” Jar:

How it works: Designate a jar or container specifically for spare change. Every time you receive change, whether from a purchase or as a gift, put it in the jar. You’ll be surprised at how quickly it adds up! It also encourages you to spend the cash you have on hand and not use a credit card or debit card where you may be spending more.

Why it works: This is a simple and effortless way to save money without making significant changes to your spending habits. It’s also a great way to use up loose change that often gets lost or forgotten.

3. The “Envelope System” for Budgeting:

How it works: Allocate a specific amount of cash for different spending categories (e.g., groceries, entertainment, dining out, etc.). Place the cash in separate envelopes labeled with each category. Once the money in an envelope is gone, you can’t spend any more in that category until the next month. This method has gained great popularity lately.

Why it works: This method helps you stick to your budget and avoid overspending in certain areas. It provides a tangible way to track your spending and encourages you to be more mindful of your money.  

4. The “Round-Up” Rule:

How it works: Whenever you make a purchase, round up the amount to the nearest dollar (or even higher) and transfer the difference to your savings account. For example, if you spend $23.50, round it up to $24 and transfer the extra $0.50 to savings, even if in the change jar. Remember to use cash whenever possible.  

Why it works: This is a painless way to save small amounts of money consistently. The rounded-up amounts may seem insignificant on their own, but they can add up to a substantial sum over time.

5. The “30-Day Rule” for Impulse Buys:

How it works: Whenever you’re tempted to make a non-essential purchase, wait 30 days before buying it. This gives you time to evaluate whether you truly need the item or if it was just an impulse.

Why it works: This rule helps you avoid buyer’s remorse and prevents you from wasting money on things you don’t really need. Often, after 30 days, you may realize you no longer want the item or find a more affordable alternative that helps you save additional money. 

6. The “No Spend Day” Challenge:

How it works: Choose one or more days each week where you commit to not spending any money at all. This includes avoiding all purchases, even small ones like coffee or snacks. This habit can result in powerful savings over time.

Why it works: This challenge encourages you to be more resourceful and find free or low-cost ways to entertain yourself and meet your needs. It can also help you break the habit of spending money out of boredom or habit.

7. The “Cashback Rewards” Strategy:

How it works: Take full advantage of cashback rewards programs offered by credit cards or shopping apps. These programs give you a percentage of your spending back as cash, which you can then deposit into your savings account but be sure not to overspend for the sake of rewards.  

Why it works: This is a way to earn money while you spend, making your purchases more rewarding. Over time, the cashback rewards can accumulate into a significant amount of savings.  

8.  Weekly $ Saving Challenge

How it works: Start by putting a dollar into your savings account in the first week.

Then, increase the amount to $2 in week two, $3 in week three, and so on. Over the       course of one year, you will have contributed a hefty amount toward savings. If you start this week, then your savings will total nearly $1,400 by this time next year.

Why it works: It starts you on a path of developing an ongoing savings habit with reasonable amounts of money and shows you what you can accomplish with consistency.

9.   The Penny Savings Challenge

How it works: Start by putting 1 penny away on day 1, 2 pennies on day 2 and so on so that you are adding another penny each day. Prepare to do this for 365 days consistently. Once you reach day 365, you will have $667.95!   

Why it works: This example shows you the power of even very small amounts of money saved over time and how money grows from small, manageable habits.

Remember, the key to successful saving is to find methods that work for you and that you can stick to in the long run. This can result in significant savings. Don’t be afraid to experiment with different strategies and adapt them to your specific needs and preferences for savings success!

Keep reading about additional, effective ways to boost your savings!  

15 Creative Ways To Save Money Without Making Significant Changes | Bankrate

40 Simple Ideas for How to Save Money Fast – Synchrony Bank

10 Creative Ways to Save Money | Space Coast Credit Union

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Budget, Credit, Parachute Services

Money Matters: A Couple’s Roadmap to Financial Success

Money can be a highly sensitive topic, often leading to tension and conflict in relationships. However, open, frequent and honest communication about finances is essential for building a strong and secure future together. By approaching the conversation with understanding and a willingness to work as a team, you can navigate financial challenges and strengthen your bond and achieve your financial goals. 

Why is it Important to Talk About Money?

  • Shared Financial Goals: Discussing your long-term financial goals, such as buying a home, starting a family, or retiring early, can help you align your aspirations and work towards them together as a team. This can help you achieve your dreams faster and easier. 
  • Budgeting and Spending: Creating a joint budget can help you track your income and expenses, identify areas where you can cut back, and save for important goals.
  • Debt Management: If either of you has debt, open communication about debt repayment strategies can help you develop a plan to become debt-free.
  • Emergency Fund: Building an emergency fund is essential for current and long-term financial security. Discussing your savings goals regularly can help you stay motivated and on track.
  • Investment Strategies: If you’re considering investing, talking about your risk tolerance and investment goals can help you make informed decisions together. Educate yourself first and/or talk to financial experts.

Tips for a Successful Money Talk:

  • Choose the Right Time and Place: Find a quiet, distraction-free or even uplifting environment (e.g., by the water, a park) where you can talk without interruptions.
  • Start with a Positive Attitude: Approach the conversation with a positive and open mindset.
  • Be Honest and Transparent: Share your financial situation, including income, expenses, and debts, honestly and openly.
  • Active Listening: Pay attention to your partner’s perspective and ask clarifying questions. Don’t listen chiefly to respond where you are focusing mostly on your answer. 
  • Avoid Accusations and Blame: Focus on finding solutions, not pointing fingers.
  • Compromise and Flexibility: Be willing to meet your partner halfway and find common ground.
  • Set Realistic Goals: Create achievable financial goals that you both can work towards.
  • Regular Check-ins: Schedule regular check-ins to review your financial progress and make any adjustments as needed.

Overcoming Obstacles:

  • Different Financial Habits: If you have different spending habits, find a balance that works for both of you. Work to meet in the middle. 
  • Past Financial Mistakes: Don’t dwell on past mistakes and the blame game. Focus on moving forward and learning from the past.
  • Disagreements: If you disagree, try to understand your partner’s perspective by understanding their approach to money and work to find a compromise.

By following these tips and approaching the conversation with empathy and understanding, you can build a strong financial foundation for your relationship. Remember, open and honest communication is key to a successful financial partnership!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Budget, Credit, Debt, Parachute Services

15 High Impact Money Quotes

Here are 15 quotes to help motivate you to work toward those financial goals for 2025!

“The more you learn, the more you earn.” – Warren Buffett

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki  

“Wealth consists not in having great possessions, but in having few wants.” – Epictetus

“The way to get started is to quit talking and begin doing.” – Walt Disney

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” – Ayn Rand

“The goal isn’t more money. The goal is living life on your terms.” – Chris Brogan

“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffett

“The future belongs to those who believe in the beauty of their dreams.” – Eleanor Roosevelt

“Believe you can and you’re halfway there.” – Theodore Roosevelt

“The only limit to our realization of tomorrow will be our doubts of today.” – Franklin D. Roosevelt  

“The mind is everything. What you think you become.” – Buddha

“It does not matter how slowly you go as long as you do not stop.” – Confucius

“It’s not your salary that makes you rich, it’s your spending habits.” – Charles Jaffe

“Money grows on the tree of persistence” – Japanese Proverb

“Every time you borrow money, you’re robbing your future self.” – Nathan W. Morris

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your situation? Check us out at https://parachutecreditcounseling.org/  or call 716-712-2060.

Credit, Debt, Parachute Services

Debt and Mental Health: A Complex Relationship

The connection between debt and mental health is a complex and often overlooked issue. It has only more recently gained attention.  Financial stress can have a significant impact on emotional well-being, leading to a range of mental health problems.

Common Mental Health Issues Linked to Debt:

  • Anxiety: Constant worry about bills, debt collectors, and financial instability can lead to generalized anxiety disorder.
  • Depression: The overwhelming burden of debt can contribute to feelings of hopelessness, sadness, and low self-esteem.
  • Stress: Financial stress can trigger physical symptoms like headaches, fatigue, and digestive problems, as well as emotional distress.
  • Insomnia: Difficulty sleeping due to financial worries can further exacerbate mental health issues.
  • Substance abuse: As a coping mechanism, some individuals may turn to alcohol or drugs to deal with financial anxiety as opposed to more positive coping techniques. 

Factors Contributing to the Link Between Debt and Mental Health:

  • Stigma: The fear of judgment or shame can prevent individuals from seeking help for both their financial and mental health problems. There is sometimes also denial of the situation leading people to avoid seeking the assistance they need. 
  • Lack of Support: Social isolation and a lack of support systems can make it difficult to cope with financial stress.
  • Overwhelming Debt: The sheer amount of debt can feel insurmountable, leading to feelings of hopelessness and despair.
  • Predatory lending: High-interest rates and predatory lending practices can create a cycle of debt that is difficult to break out of. Be careful before you take out any additional financial obligations as a way to get out of debt. Talk to non-profit counselors such as those at Parachute first.  

Strategies for Managing Debt and Mental Health:

  • Seek Professional Help: A therapist can provide support, coping strategies, and guidance for managing both financial and emotional challenges.
  • Financial counselors: Financial counselors can help you develop a plan to manage your debt and improve your financial situation.  You can find them at Parachute!
  • Create a Budget: Developing a budget can help you gain control over your finances and reduce stress. It can help empower you and identify a plan that will help you gain control of your financial situation. 
  • Negotiate with Creditors: Reach out directly to creditors to discuss payment plans or debt reduction options.
  • Practice Self-Care: Engage in activities that promote relaxation and well-being, such as positive self-talk, exercise, meditation, or spending time with loved ones.  
  • Join a Support Group: Connecting with others who are facing similar challenges can provide comfort and support.

If you’re struggling with debt and mental health, it’s important to know that you’re not alone especially in these days of high inflation. Seeking help from professionals can make a significant difference in your overall well-being.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your debt? Check out our Financial Counseling Session https://parachutecreditcounseling.org/services/debt-management/#financial-counseling or call 716-712-2060.

Budget, Credit, Debt, Parachute Services

10 Money Moves for a Brighter Financial Future

Ready to take flight? We’ve just launched a new blog post! We hope it will help you soar to new heights. Check it out and share the adventure with your friends!

  1. Track Your Spending

We underestimate what we spend and we often have multiple (mostly small) budget leaks that can add up to BIG losses. Benjamin Franklin said, “Beware of small expenses. A small leak can sink a great ship”.  Think of a small leak in a pipe under a sink. While it is a small, maybe even an infrequent leak or drip, over time, the bucket below the sink can be full of water just a few days later! The same loss can happen to our hard-earned money if we are not mindful of how we are spending it. 

  • Review your spending plan (i.e., budget) regularly

Your budget or spending plan is simply a plan of what money is coming in every month and what money is going out. You want to pre-plan so you know if all your expenses are covered or if you need to concerned about a deficit. Your spending plan or monthly budget can actually be perceived as a wealth building plan if you prioritize regular savings, even small amounts that can help you avoid credit card debt and high interest charges. Your life changes over time and your budget needs to reflect these changes such as a job or income change, a new baby, a mortgage or planning for a vacation, etc. By regularly paying attention to your budget, you can gain greater control over your money and direct the funds where you want them to go – including your financial goals such as a new car, a new place to live, etc.  

  • Live Below Your Means

If you spend less than you make, you will always have some money! Of course, there are times you may need to borrow money and incur debt, but most debt should be based off of our needs and not wants and you don’t want to confuse the two. High interest credit card debt can quickly ramp up leaving you on a debt treadmill where you may be struggling just to make minimum payments. In the meantime, savings and financial goals suffer like buying a home or saving for an earlier retirement.

  • Automate your savings/investments

If you “set it and forget it” savings and investing becomes a very easy process and funds will grow over time with interest earnings. Don’t withdraw your funds unless there is a true emergency. Shop FDIC insured banks or NCUA credit unions and compare interest rates for the best returns on your money. Educate yourself on investing and understand the risk that can be involved or consult a financial expert who can help you make decisions for your level of risk tolerance. Investing can be both a very safe and also a very risky proposition depends on the decisions you make.

  • Have more than one income stream

By having more than one income stream, you help protect yourself against any future income losses. If you would ever lose a job, there would still be some funds coming in. Extra funds can always be used to pay down debt, build savings and provide a financial cushion for unexpected events (e.g., major car repair, home repair, illness) as life happens to everyone!  Having a cushion of savings and some financial breathing room helps emergencies becoming inconveniences and not the other way around! 

  • Hold a long-term view/save or invest for the long term

Saving and investing for the future is just that and money takes time to grow through compounding interest (interest earned that earns more money on itself). Warren Buffet describes compounding interest as “a snowball rolling down a hill” and Einstein described it as “The 8th wonder of the world.” Small amounts of regularly saved or invested money can grow to BIG savings and investment over time.  It requires regular contributions, time, attention and patience.  A perfect example of this is how many people save for retirement so they can enjoy many decades without working. 

  • Avoid excessive and bad debt

Bad debt is debt that has high interest attached sometimes making it impossible to pay it down, especially if it is credit card debt and you keep using the cards. Using credit cards to supplement your income or lifestyle can be a dangerous practice resulting in numerous decades of debt repayment – a debt treadmill where thousands of dollars are being paid out in interest. Bad debt is often unsecured, meaning it does not have any collateral behind it like a house, which can appreciate in value over time.      

  • Learn about money

Financial experts believe that success with money is 80% determined by our decisions and behaviors around our money. The more we learn about how money works and investigate why we make the decisions we make, the more successful we can be! There are lots of easy ways to learn about money! There are articles on online, websites, books, podcasts, documentaries on Netflix and more. There are also many people who work in the financial services industry like the financial counselors at Parachute who can provide trusted advice or point you in the right direction!      

  • Prioritize saving over spending

The key is to try to make regular savings a priority over spending, especially for those wants or luxury items as opposed our basic needs such as food, clothing, shelter, medical and transportation. Approaching your financial health from a savings mindset can help assure there are funds available for you for emergencies (thereby avoiding debt or as much debt) but also for future choices, opportunities and goals.  Having savings helps provide financial stability over time.  Make saving a habit early on for big long term pay offs! 

  1. Ask for Assistance

As said earlier, there are lots of ways to learn about money and get advice from others who work professionally in related fields. There are many books, podcasts, online resources and guides to help! You don’t need to go it alone as mistakes can be costly.  

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.