Budget Archives - Parachute

Budget Strategies During Times of High Inflation

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

Track Your Spending:

Know Where Your Money Goes: Before you can make any 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 here – Research budget apps at The Best Budget Apps for 2024 – NerdWallet. Be honest with yourself about what you need and what you want. Needs reflect those things we need to survive. Wants can often wait for future paychecks.

Cut Back on Discretionary Spending:

Identify Areas to Trim: Once you see where your money goes, pinpoint areas where you can cut back. This could include dining out, entertainment subscriptions, impulse purchases or those small daily habits that add up quickly.
Embrace Frugal Fun: Find free or low-cost alternatives for entertainment. Explore local parks, 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 improve their budget and boost savings.
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.
Embrace Meatless Meals: Meat can be a significant expense. Try incorporating more vegetarian meals into your diet. Try to identify more high protein items like peanut butter, legumes, and tofu.

Be Strategic with Debt:

Prioritize High-Interest Debt: Focus on paying down credit card debt first, as high interest rates can quickly magnify 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.

Explore Balance Transfers: If you have good credit, consider a balance transfer card with a 0% introductory APR to temporarily reduce your interest charges.

Boost Your Income (if possible):

Explore Side Hustles: Look for ways to generate extra income, like freelancing, online gigs, selling unused items, making deliveries, etc. Check out 25 Passive Income Ideas To Help You Make Money In 2024 | Bankrate. Also, if inflation is eroding your purchasing power, consider having a conversation with your employer about a raise to keep your salary competitive.

Additional Tips:

Shop Around for Better Deals: Compare prices on everything from groceries to insurance to ensure you’re getting the best value.

Review Subscriptions: Audit your monthly subscriptions and cancel any you don’t use regularly.

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.

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 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.

Fix Leaks: A leaky faucet or dripping showerhead can waste a lot of water and energy. 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.

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, Credit, Debt, Parachute Services

Top 20 Inspirational Quotes That Relate to Money

We all need a little inspiration sometimes! Here are some great quotes to give inspriation around your finances:

“The only reason for time is so we can experience change. The only reason for money is so we can experience life.” – Tony Robbins
“Investing in yourself is the best investment you can ever make. It will pay the best interest.” – Warren Buffett
Financial freedom is the ability to live the life you want, when you want, on your own terms.” – Robert Kiyosaki
“If you’re saving, you’re succeeding.” – Steve Burkholder
“The key to making money is to save money.” – Horace Greeley
“Owning a home is a keystone of wealth… both financial and emotional.” – Suze Orman
“The only time to buy something is when you can afford it.” – Thomas Jefferson
“Financial peace isn’t the absence of money; it’s the absence of worry.” – Dave Ramsey
“Budgeting is telling your money where to go, instead of wondering where it went.” – John Barnes
“The more you learn, the more you earn.” – W. Clement Stone
“Don’t tell me what your priorities are. Show me where you spend your money, and I’ll tell you what they are.” – James W. Frick
“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffett
“Formal education will make you a living; self-education will make you a fortune.” – Jim Rohn
“Start where you are. Use what you have. Do what you can.” – Arthur Ashe
“Don’t be afraid to give up the good to go for the great.” – John D. Rockefeller
“The journey of a thousand miles begins with a single step.” – Lao Tzu
“The best way to predict the future is to create it.” – Peter Drucker
“You miss 100% of the shots you don’t take.” – Wayne Gretzky
“The mind is everything. What you think you become.” – Buddha
“Believe you can and you’re halfway there.” – Theodore Roosevelt

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/

Budget, Parachute Services

Spenders and Savers: Building Financial Harmony as a Couple

Money can be a major source of stress, especially for couples with different spending habits. But fear not, spenders and savers can achieve financial harmony with open communication, compromise, and a team approach!

Communication is Key:

Talk openly about your goals: Dream vacations, a new house, or a comfortable retirement – discuss your individual goals and find common ground. These shared dreams will be the foundation of your financial plan. Remember, you’re a team, so work together! This builds a stronger foundation for your future.
Understand each other’s “why”: Instead of labels like “spender” or “saver,” have honest conversations about the reasons behind your financial behaviors. Explore any anxieties, hopes, or past experiences that shape your views on money. Sharing these creates context and fosters empathy.

Planning for Your Future:

Budgeting Together: Create a realistic budget that reflects your income, expenses, savings goals, and some fun money! Budgeting apps can simplify this process. Take time to find one that works for both of you – it’s an investment in your future, together.
Saving and Spending: Allocate specific amounts for both short- and long-term goals, like an emergency fund or retirement. Don’t forget to include fun – a vacation fund or a “splurge” category – ensuring both security and enjoyment. Consider separate accounts for different purposes if that helps with organization.
Set Spending Limits: If impulse buying is a concern, agree on spending limits for specific categories. Consider using cash for non-essential purchases – we tend to spend less with cash than cards!

Compromise and Flexibility:

Be Flexible: There will be times when adjustments are needed. Be open to compromise, finding solutions that work for both. Recognize that needs may differ, and adjustments might be temporary. After all, delayed gratification helps achieve bigger goals!
Celebrate Your Wins!: Acknowledge and celebrate progress towards your goals together. This keeps you motivated and strengthens your commitment to building a secure financial future.

Additional Tips:

Regular Check-Ins: Schedule regular reviews of your budget and goals. Treat it like an important meeting – even 20 minutes a week can make a difference!
Seek Help if Needed: If managing finances feels overwhelming, consider seeking guidance from a financial advisor or counselor (like Parachute!) They can provide personalized advice and help you create a sustainable plan.
Communication is Key: Throughout the process, maintain open and honest communication about finances. Remember, building a healthy financial relationship requires teamwork and understanding.

By following these tips and fostering a supportive environment, spender-saver couples can navigate financial challenges, achieve their goals, and build a bright future together.

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/

Budget, Parachute Services

Top 10 Money Myths

There are a surprising number of myths surrounding money and how to manage it. These myths can hold people back from achieving financial wellness, which contributes to our overall well-being. Here are some of the most popular myths and the truths behind them:

Myth #1: More money = more happiness

Truth: While money can certainly provide security and comfort, research shows that beyond a certain point, it has little impact on happiness. True happiness comes from meaningful relationships, good health, and personal growth, not just the size of your bank account. Various studies show that most people feel most satisfied making about $75K+ worldwide. However, happiness is influenced by multiple factors beyond income. Strong relationships, meaningful work, good health, and personal growth all contribute to overall well-being. The “ideal” income for happiness may increase over time. Inflation and rising costs of living can shift the threshold for financial satisfaction.

Myth #2: You need a high income to build wealth

Truth: Building wealth is more about smart habits and financial discipline than having a high income. Living below your means, saving consistently, and investing wisely can help anyone build wealth over time, regardless of their income level.

Myth #3: All debt is bad

Truth: Not all debt is created equal. Good debt, like a mortgage or student loan, can be an investment in your future and help you achieve financial goals. Bad debt, like high-interest credit card debt, can drag you down and hinder your progress.

Myth #4: Investing is risky and only for the rich

Truth: Investing can be intimidating, but it doesn’t have to be risky or exclusive. There are many low-risk investment options available, and starting small and diversifying your portfolio can help mitigate risk. Anyone can benefit from the power of compound interest and grow their wealth through investing.

Myth #5: You should wait until retirement to save for retirement

Truth: The earlier you start saving for retirement, the better. Time is your best friend when it comes to compounding interest, so starting early even with small contributions can make a big difference in the long run. You may not be physically able to work in your later years and may need retirement income for 30+ years given overall life expectancies and your family history.

Myth #6: Budgeting is boring and restrictive

Truth: Budgeting can actually be empowering and freeing. It gives you control over your finances and allows you to make conscious choices about where your money goes. There are many budgeting methods available to find one that fits your lifestyle and preferences.

Myth #7: Talking about money is taboo

Truth: Open communication about finances is crucial for healthy relationships and financial well-being. Talking openly and honestly about money with partners, family, and friends can help you make informed decisions and support each other in your financial goals.

Myth #8: You need a perfect credit score.

Truth: While a good score is beneficial, it’s not everything. Building and maintaining good credit habits is more important than reaching a perfect score. Strong but not perfect scores can help you obtain more credit at lower interest rates.

Myth #9: Saving for a house is always the best investment.

Truth: Consider your needs, lifestyle preferences and goals. While homeownership can be rewarding, it also involves significant expenses and risks. Analyze other investment options as well before deciding to commit to a home.

Myth #10: You can always find “get rich quick” schemes.

Truth: Sustainable wealth building takes time and effort. Be wary of quick-fix solutions promising instant riches. Focus on consistent, responsible financial habits over the long term. Consistent habits over time have a large pay off.

By debunking these myths and understanding the truth about money, you can make informed decisions and take charge of your financial future. Remember, financial well-being is a journey, not a destination. It’s about building healthy habits, making smart choices, and continuously learning and adapting.

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/

Budget, Credit

Financial Topics for Teens

If you are a teen or (have a teenager in your life), the following tips will be useful in establishing sound money practices early in life leading to stronger financial stability over time.

Bank accounts and debit cards: Teens should learn how to open a bank account, deposit and withdraw money, and use a debit card. They should also read about and understand the fees associated with these services.

Budgeting: Teens can start learning to budget by tracking their income and expenses. This will help them see where their money is going and make sure they’re not spending more than they earn.

Saving: Teens should start saving early, even if it’s just a small amount each month. The more time saving, the more compounding interest has to work. There are many ways to save, such as putting money in a savings account, buying a savings bond, or investing in a mutual fund.

Credit: Teens should learn about establishing credit and how to use it responsibly. This includes understanding how to build a good credit score and how to avoid debt problems.

College planning: If they plan to pursue higher education, teens need to start thinking about college early, including how they will pay for it. They should research different financial aid options and start saving for college as soon as possible.

Getting a job: Teens can start earning money by getting a part-time job. This is a great way to learn about responsibility, money management and feel a sense of accomplishment.

Starting a business: Some teens are interested in starting their own businesses. This can be a great way to learn about entrepreneurship and make money. However, it’s important to do your research and create a business plan before getting started.

Investing: Teens can start investing early, even with a small amount of money. There are many different investment options available, such as stocks, bonds, and mutual funds. It’s important to talk to a financial advisor before investing to make sure you understand the risks involved.

There are many resources available to help teens learn about financial topics. They can talk to their parents, teachers, or a financial advisor. They can also find information online and in books and magazines.

Here are some additional tips for teens:

Talk to your parents. Your parents may be a great resource for learning about financial topics. They can teach you about their own experiences and help you make sound financial decisions.

Do your research. There is a lot of information available about financial topics. Take some time to read books, articles, listen to podcasts and search websites to learn as much as you can.

Start early. The earlier you start learning about financial topics, the better prepared you will be for the future.

Don’t be afraid to ask for help. If you have any questions about financial topics, don’t be afraid to ask your parents, other family members, teachers, or a financial advisor for help.

By learning about financial topics and making smart financial decisions early on, teens can set themselves up for financial success in the future.

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/

Budget, Parachute Services

Money and Relationships

Money can be a major source of stress and conflict in any relationship and often is quoted as the top reason for break-ups and divorces. Therefore, it is especially important to manage it carefully in romantic partnerships. Here are a few tips for managing money and relationships.

Communicate openly and honestly about your finances. This includes sharing your income, debts, and spending habits. It’s important to be upfront with each other about your spending habits and financial situation so that you can make decisions together and find ways to strengthen your financial future as a team. It can be uncomfortable and even embarrassing to share some aspects of our financial lives, but it will ultimately help empower you both to establish good money habits.

Create a monthly spending plan (budget) and stick to it. This will help you track your income and expenses so that you can make sure you’re living within your means. There are many different budgeting methods available, so find one that works for you and your partner. You could even try a blend of methods to help you reach those goals! Sound spending plans are the foundation for establishing financial stability and wealth building.

Set financial goals together as a united front. Do you want to buy a house? Save for retirement? Pay off debt? Once you know what your goals are, you can start working towards them together and potentially reach them faster. Place the goals in writing somewhere you will both see them regularly (e.g., on a mirror or refrigerator, on your cell phones).

Don’t make major financial decisions without consulting your partner. This includes things like buying a car, taking out a loan, or making a large purchase. Talking about these decisions before you make them can help to avoid conflict later. Think about if your partner made a major financial decision without consulting you and how you might feel. Remember the team approach.

Be respectful of each other’s spending habits. Even if you don’t agree with how your partner spends their money, it’s important to be respectful of their choices. If you’re concerned about their spending, talk to them about it in a calm and constructive way that stays centered on your shared goals.

Couple discussing money

Don’t let money problems come between you. If you’re having financial problems, it’s important to work together to solve them. Don’t blame each other or let your problems fester over time. Take action to address the issue before it gets bigger.

Seek professional help if you need it. If you’re struggling to manage your finances or communicate about money with your partner, a financial advisor, financial social worker, or a therapist can help.

Money can be a difficult and emotional topic to talk about as people most often feel a range of emotions such as fear and shame, but it’s important to have open and honest communication about your finances in order to maintain a healthy relationship. By following these tips, you can help to avoid conflict and build a strong financial foundation for your future together and also serve as an effective financial role model for your children.

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/