Inflation and rising interest rates have been on the minds of many consumers in recent months as the cost of everything from groceries to gas, cars to homes has risen.
A recent WSFS survey found that 44% of respondents in the Greater Philadelphia and Delaware area are not confident they can keep pace with the impact of inflation on goods and services. And as the Federal Reserve continues to aggressively raise interest rates to combat soaring inflation, many consumers are feeling a major impact on their wallets.
Here are some tips to help you refine your budget and stay on track to reach your financial goals.
Start with the basics
Building an emergency fund (54%) and saving for a major purchase (36%) were among the top goals cited by regional respondents in the WSFS survey. These goals can take time to achieve, even in times of low or no inflation, so extra vigilance will be needed to keep your budget on track.
A good place to start is to take a close look at your monthly statements to see where you can tighten things up a bit. Online banking (64%) and mobile banking (61%) were the top tools cited by regional respondents for managing their money, and can be a great budgeting resource.
If you haven’t already signed up for online or mobile banking at your bank, consider setting up an account and carefully review your statements for the past few months.
Are there unused subscription services? How much do you spend on your weekly groceries? How often do you go out to eat? These are just a few of the questions to ask yourself when looking at your budget for savings.
With inflation impacting the cost of almost everything, now is the time to seek out deals on food and basic necessities and look to cut unnecessary costs to ensure your budget doesn’t fall into a deficit.
Set achievable goals
As with many things in life, setting concrete, measurable goals for your finances can help you establish a clear roadmap to where you want to go.
Increasing retirement savings (47%) was among the top goals cited by regional respondents. While it may be more difficult to increase savings during times of inflation, having a plan in place can still help make those goals more achievable.
If you already find yourself with extra accumulated savings, consider transferring the money you don’t need in the short term into a money market or similar account that will earn more interest, and be sure to maximize contributions matching from your employer for your 401(k) or retirement plans.
If you’re not sure where to start in setting your goals, meeting with your banker or financial advisor can be a great first step in putting an action plan in place.
Keep an eye on loans
With interest rates on the rise and impacting everything from credit cards to mortgages, now is the time to get your borrowing under control to ensure you don’t take on too much debt. Paying off debt other than a mortgage (44%) was another top priority for respondents in the region.
Be sure to pay off your credit card balance each month to avoid accruing interest where possible. If you are unable to pay off your cards each month, start with the account with the highest interest rate or consider consolidating your debt with a card with a better interest rate or through a personal loan.
If you have federal student loan debt that qualified for suspension of payments, consider paying off as much of the loan as possible while interest is still frozen to make a bigger dent in principle before payments resume. required.
Saving and budgeting are lifelong skills in your financial journey. Although rising inflation and interest rates can make it more difficult to achieve your goals, having an action plan in place and making regular adjustments to stay on track can help put you on the path to success.
Vernita Dorsey is senior vice president, director of community strategy at WSFS Bank. She has over 38 years of experience as a community banker and has actively served her community throughout her career.