Vincenza Vicari-Bentley, AFC

What happens to spending during periods of high inflation? There is a rise in the prices of goods and services reducing our purchasing power. It feels like you’re spending more but getting less. So how can we identify and eliminate wasteful spending to get back some of that purchasing power?

My number one strategy is to track your spending.  How do you know where you can cut back if you don’t know where your money is going? If you don't yet have a monthly budget, create one this month. Another reason it’s important to track your spending is to become more aware of your spending habits. If you don’t know where your money is going, you won’t be able to recognize negative spending behaviors that you can easily change to make your money work for you.

For example, you might learn from tracking your expenses that you are paying monthly for a service you don't use (like a subscription), in which case you could eliminate it or switch to a cheaper one. Or, you might realize that your habit of dining out is costing you a lot more than you thought. 

How to track expenses? You can be low-tech and use a notebook or you can use a budgeting app or software - and there are a lot of free ones out there! It may seem like a lot of work to keep tabs on your expenses. If you’re not used to doing this start slow and just track your food spending for a week.

Understanding why and how to track spending with just a little effort can help you successfully establish a new habit. This new habit can lead to increased spending awareness and eliminate wasteful spending habits. Everyone could benefit from scrutinizing a bit more where our hard earned money goes!

Amanda H. Christensen, AFC, Extension Professor
Utah State University

In conjunction with launching the new website, www.inflation.usu.edu, local news outlet KSL 5 reached out this week and asked what I thought was the biggest financial mistake many people are making right now to cope with inflation. 

My response: Opening credit cards and using them to maintain the same level of pre-inflation spending. 

Watch the full segment here.

According to Equifax, the increase in credit card applications are up 30% compared to this time last year. Credit card rates rise when the feds raise interest rates which they have already done multiple times this year to try and curb our inflation-related economic issues. This means you'll be paying much more tomorrow for the debt you incur today. 

My advice: Don't finance your life away to maintain your pre-inflation standard of living.

Instead of using credit cards to spend without restraint, focus on a few problem areas (aka groceries, gas, etc.) and make a commitment to trim expenses next month. Download the Cutting Expenses Guidebook to guide your decisions. This free resource has ideas to trim expenses in nine categories and a section on how to boost savings. Your future self (and all the fun things you want to do in the future) will thank you. 

Join one of our free webinars to learn more about how to inflation-proof your finances. See the full list of upcoming webinars HERE.

Alicia Nelson-Bell, Empowering Financial Wellness Program Coordinator

It’s Christmas in July! Yep. You heard me right! You may be thinking to yourself,  “How can I be thinking about the holidays right now when my budget is already being squeezed so tight"?  But really, it's a good reason to start thinking about a plan for holiday spending sooner than later this year. Creating a plan and being a bit more prepared financially will pay off big time.

Why the friendly reminder?
In the 3rd quarter of 2021, AKA when most people did their holiday shopping, Americans added over $74 billion to credit card balances. Over 80% of those who put holiday expenses on their credit card carry a balance for an average of 3 months after the holidays and are paying an average of 18% interest. This makes those “good deals” you scored not so great when you pay 18% or more interest on them for multiple months! 

Alicia Nelson-Bell, Empowering Financial Wellness Program Coordinator

I’m sure that over the course of the last year we have all seen that our grocery money doesn’t buy us as much as it used to. Because of this, it is even more important to be strategic in how we use our funds at the grocery store so we can meet our family’s needs without breaking the budget. Grocery budgets are a variable expense and with prices going up and up on many items at the store, let me share a simple tip that thousands of other people have found successful to save money on the food you buy.   

Melanie Dabb, Extension Assistant Professor