Navigating your budget during tough economic times
Published on January 25, 2024
Times are tough—the price of everything seems to go up while paychecks stay the same. It’s frustrating and can feel defeating. While we can’t control the price of groceries or rent right now, we can at least find a way to help our finances in the current economy. Let’s start with a better way to approach how we budget.
List Expenses from Most to Least
Know what you’re paying and when
Listing what goes out the door every month is the no-brainer first step to every budget.
- Mortgage/Rent
- Auto
- Groceries
- Utilities
- Medical bills
- TV, cable, internet and cell phone subscriptions
- Dining and entertainment
- Child care
- Gas
- Student loans
- Pet expenses
- Other recurring payments
Get rid of the subscriptions you barely use, the gym membership you haven’t touched, or make the conscious decision to stop any frivolous spending. These items are the low-hanging fruit.
Metro Members: you can create this budget inside your Metro iBanking account! With MoneyView you can track your spending with a customizable budgeting tool that makes budgeting even easier than before!
Extra Cost-Saving Measures
Switch up your routine
You’ve made the list and slashed out the expenses you don’t need, but the process isn’t done. Now, taking it one step-further, let’s look at your necessities and see what we can do different.
Take groceries as an example. Your food costs may be $200 a week at a brand name store, but the same items could cost less at a chain known for being a cost-saver like Market Basket or ALDI. If you can save $30, $50, $70 a month, you can reallocate that savings toward debts you’re working to pay down.
With utilities like electricity, it’s hard to control the prices but see what you can do to cut back on usage. Check with your supplier to see if there is a cost breakdown that can show you usage during the day and try to identify a few things that could be turned off when not in use.
Don’t Pay Money Later for Money Now
Don’t pay more than you have to
Interest isn’t a bad thing, but it can keep you stuck in the negative cycles if your debt keeps going up while your income doesn’t. This time last year, a report from TransUnion calculated that the average American has over $5,700 in credit card debt. Experts believe that number is only on the rise.
Part of the rise: high interest rates. We see it in the housing and auto market, but those needs might not be avoidable for some. Credit cards are something you have more control over, and with rates averaging at or above 20%, you’re paying more money for your money, and this could be eating up a chunk of your monthly income. Always try to pay the full balance of your credit card each month. If you don’t have the money in your checking account, the purchase is probably not affordable.
If you’re trying to be aggressive with your debt, and get the sum lowered quicker, consider a consolidation credit card or loan. They often have introduction periods of 0% interest, that gives you anywhere for 12-18 months to get things under control.
Also, take note of fees in your accounts. Are you paying overdraft fees? Late penalties? Again, don’t pay money for money. Each dollar you spend in fees is a dollar you can’t use to pay down debts or use towards savings. Staying organized is a tool to help you avoid paying extra.
If you know you have a payment coming up and you might run into an issue, reach out to find other options that might help. At Metro, our Digital Branch agents are available to talk with you about the situation and see what options you might have to avoid fees and make your payments.
Invest in You
Have you considered the potential payoff of investing in yourself?
Even after making cuts and setting a budget that works for your day-to-day needs, it’s may not leave enough behind to fund your long-term goals. It’s difficult to get ahead with a stagnant salary, so diversifying your skills could open more opportunities in a higher salary range—especially if it feels like you’re no longer growing in your current role.
Evaluate your current position and understand what typical growth looks like in that role. Identify positions that would be a realistic next step for you and what skills they may require so you know what resources you’ll need to find.
Three things you can do for free to get started:
- Take free courses through online learning platforms or *community colleges.
- Connect with bosses or coworkers to train on a new project, skill, or system.
- Check your current company benefits or with your human resources department about company-sponsored education incentives.
If your salary situation isn’t helping you dwindle down that debt, afford the living situation you need, or other necessities, it may be time to consider how you can elevate within your career or how you can make the switch to a better one.
*Massachusetts residents 25 and older who do not already have a college degree qualify for MassReconnect, a state initiative that offers free tuition for qualified applicants. Boston residents also qualify for the Tuition-Free Community College Plan (TFCC).
