Author: Stacey Robb

How many times have you tried to create a budget and stick to it?  It’s something that’s so difficult for so many people, so it can be tempting to stop even trying.  But before you give up… know that budgeting can be critically important to ensure your financial health and stability.  There are concrete ways to make a difficult thing more manageable (and maybe even fun)!

Why is budgeting so important?

1. Tracking your expenses helps you control your spending, and save more money.  When you manage your finances without a budget, there really isn’t anything preventing you from spending beyond your means.  You may have a general idea about how much money you spend on certain things, but without actual (accurate) numbers, it’s easy to let your spending habits get out of control.  When you live on a budget, it’s much easier to see where you may be frivolously overspending, and when you can see waste that can be eliminated, you now have an ability to put that “extra” money into savings that you didn’t think you had before.  Who doesn’t love saving money?
2. It helps you make wiser financial decisions and be better prepared for emergencies.  As I’m sure you already know, life comes with all kinds of emergency situations that can many times be very expensive.  If you plan for (and stick to) saving for these potential emergency expenses, you can avoid financial difficulties in the future.  From emergency room bills to unexpected home repairs, without mindful and intentional planning, you put yourself at risk of going into (sometimes significant) debt… that you may not even have the means to pay.  It’s recommended that you have approximately 3-6 months of living expenses in emergency savings.  That may sound overwhelming to many of you, but the good news is you can start small!  $100 is better than $0.  $1 is better than $0.  Focus on what you CAN do, and not what you think you SHOULD be able to do.
3. It can improve your mental health.  Finances are incredibly overwhelming and stressful for many of us.  How many nights have you tossed and turned worrying about how you were going to pay your bills?  With a concrete plan in place, it takes away some of the headache that comes from wondering if you’ll be able to make it to your next paycheck.  Budgeting may be the unexpected self-care that you didn’t even know you needed.

How can you make budgeting work for you?

1. Keep it simple!  Track all fixed and variable expenses, but don’t overwhelm yourself with 200 detailed categories.  Know how much you spend on “needs” vs. “wants,” and use it as a guide for where to dedicate your money in a way that helps you work toward your personal financial goals.
2. Reward yourself!  Sticking to a budget requires consistency and discipline.  It’s an achievement in itself if you manage to do it!  Keep in mind if you DON’T stick to it, there is no need to punish yourself.  Use any setbacks as an opportunity to realize what went wrong, and how to fix it.
3. Find a system that works for you!  Budgeting is NOT one size fits all!  Start easy.  The NFCC (National Foundation for Credit Counseling) has a simple expense tracker that can be a good place to start – https://www.nfcc.org/resources/planning-tools-and-calculators/monthly-budget-planner/.  There are many budget templates on the internet.  Do some research and find one that you like!

Need some further help with budgeting?  CCCS of Buffalo offers Financial Coaching Sessions, where you would meet one on one with one of our Certified Financial Counselors.  From budgeting advice to suggestions for more positive spending habits, you and your counselor would work as a team to create an individualized budget and determine the best plan of action to achieve your financial goals.  Your counselor would go over your income, expenses, and Experian credit report with you, and even review ways to build on and improve your credit.

Call us today at (716) 712-2060 to schedule an in person or telephone appointment!

As most of us are well aware, trips to the grocery store and the gas pump are emptying our pockets and draining our bank accounts more than ever before…

People talk about “inflation” all the time, but what does that really mean?  In plain terms, inflation simply refers to the increase in prices over time.  The inflation rate is a measure of how quickly those prices go up.  When the inflation rate is high, consumers lose purchasing power, meaning your dollar won’t go as far tomorrow as it did today.  The current annual inflation rate for the United States is 8.6%, up from 7% in 2021 – the largest annual increase since December 1981.  It averaged 3.27% from 1914 to 2022, reaching an all-time high of 23.7% in June 1920, and a record low of -15.8% in June 1921.

Inflation can have a serious impact on everyday expenses.  Energy prices have risen 34.6% and food costs are up 10.1%, but most of us likely have not seen wage increases to keep up with those rising costs.  So how can we manage our own financial situations to minimize those effects?  Here are four tips:

1. Consider (strategically) downsizing

Do you own any assets that may be worth more now because of inflation?  If so, now could be a good time to get rid of them.  Some items to consider could be used vehicles, furniture, equipment, and recreational goods such as toys and games, since these items have all seen major prices increases due to inflation.

2. Reduce or delay certain purchases

Many items, including everyday essential expenses, have seen drastic price increases.  Here are some examples that you may want to consider reducing or eliminating:

• Gasoline
• Cars
• Clothing
• Restaurants
• Hotels
• Toys/games
• Furniture/home goods
• Travel
• Entertainment

3. Keep investing in your future

When money feels tight, it’s normal (and easy) to focus only on immediate needs and lose sight of longer-term goals.  You may be tempted to stop saving for retirement.  Even during difficult times, keep in mind that continuing to contribute to retirement and other long-term investments can be one of the best ways to fight the effects of inflation because it helps your money increase in value.

4. Review your budget

Any time prices go up, it’s important to revisit your budget – which can be as simple as making a list with all of your monthly income sources and current monthly expenses.  Budgeting may feel like it’s all about decreasing expenses, but it can also be a good opportunity to revisit your income and consider ways to bring in more money or resources.

 

Some questions to ask yourself about your expenses:

• What can I reduce or eliminate?
• Is there something I can put on hold, even if it’s just for a few months?
• Am I being charged for services I don’t even use?
• Can I negotiate or shop around for a lower price on expensive items?  Or perhaps consider secondhand?
• Am I eligible for any discounts based on my individual situation (income-based, military/veteran, senior citizen, etc.)?

 

Some questions to ask yourself about your income:

• Is there a way I can temporarily (or permanently) bring in more money?
• Am I eligible for a pay raise or a promotion?
• Do I have a product or service I could sell?
• Am I eligible for any government benefits or other assistance?
• Can another member of my household earn money or qualify for financial assistance?

If creating a budget to fight the effects of inflation seems impossible, you’re not alone!  Only about 1/3 of US adults say they have a plan for how they’ll spend each paycheck.  Instead of avoiding the task, why not get help from a professional?

Call CCCS of Buffalo, your Money Mentors, at (716) 712-2060 today to schedule an appointment to speak with one of our knowledgeable certified financial counselors!