Budgeting in a High-Inflation Environment

Inflation can throw a wrench in even the best-laid financial plans. When prices rise, your budget needs to adapt. But don't worry! We've got some practical tips and tools to help you stay on track, even when inflation is high.

Track Your Spending and Adjust Your Budget Regularly

In a high-inflation environment, prices can change rapidly. It's essential to keep a close eye on your spending and adjust your budget as needed. Regularly reviewing your expenses ensures you stay on top of price increases and helps you avoid overspending.

How to Track Your Spending:

• Use a budgeting app like the Financial Journey Guide within the First United Bank mobile app.
• Create a simple spreadsheet to monitor your daily, weekly, and monthly expenses.
• Review your bank statements regularly to identify any unusual or unexpected charges.

Prioritize Essential Spending Over Discretionary

When prices are rising, it's crucial to distinguish between essential and non-essential expenses. Focus on what you need first, and consider cutting back on extras until your budget stabilizes.

Tips for Prioritizing Spending:

• List your essential expenses, such as rent/mortgage, utilities, groceries, and transportation.
• Identify discretionary spending areas like dining out, entertainment, and subscriptions.
• Reallocate funds from non-essential categories to cover any increases in essential expenses.

Build an Emergency Fund

High inflation can bring unexpected financial challenges. Building an emergency fund provides a cushion against these uncertainties and helps you stay on track with your budget.

Steps to Build an Emergency Fund:

• Set a savings goal based on three to six months' worth of essential expenses.
• Open a separate savings account to keep your emergency fund accessible but distinct from your daily spending.
• Contribute regularly, even if it's just a small amount each month. Every little bit adds up!

Look for Ways to Save on Regular Expenses

Inflation doesn't mean you have to pay more for everything. Get creative and find ways to save on your everyday expenses.

Savings Strategies:

• Switch to generic brands for groceries and household items.
• Buy in bulk to take advantage of lower per-unit costs.
• Join grocery co-ops with friends or neighbors to share bulk purchases.
• Use discount codes and shop during sales to score the best deals.

Utilize Budgeting Tools

Take advantage of budgeting apps and tools designed to help you manage your finances in a high-inflation environment. These tools can track your spending, set savings goals, and help you map out a budget that works for you.

Recommended Tools:

• Financial Journey Guide: This feature within the First United Bank mobile app provides personalized insights and resources to help you manage your budget effectively. Learn more here.

Navigating a high-inflation environment can be challenging, but it's not impossible. By tracking your spending, prioritizing essential expenses, building an emergency fund, finding smart ways to save, and using budgeting tools, you can stay in control of your finances.

Feeling inspired? Start by reviewing your current budget and making small adjustments today. Ready to take the next step? Book a call with a First United relationship banker to explore tailored strategies for your unique situation. Together, let's turn financial challenges into opportunities for growth!