While the world may be feeling a bit easier as we see the easing of pandemic restrictions, we’re not out of the woods yet. We’re still seeing a struggle on supply and labour shortages, not to mention now the booming cost of oil adding to those transport costs for goods and services. Consumers like you and me are the ones feeling the pinch at the pump and at the grocery store (among other places).
There are ways to navigate through these times, so I wanted to share my top 5 tips for getting ahead of the rising costs and managing your cashflow:
1) Pay Attention
If you’re one to not really pay much attention at the grocery store because you’re distracted checking out, or generally don’t stray from your regular food costs to worry about it, make a point to see which items have increased in cost (or decreased in size) and make adjustments to your household spending to offset any increases in food costs. Couple that with the price of gas to get you to and from the restaurant, and it ends up not being a cheap night out.
2) Eat at home more
Sure, it’s tempting to get out there and dine in restaurants now that we can easily do so. You’ll want to support your local businesses, but many restaurants have been forced to bump up some of their meal prices. You may not notice when you’re perusing the menu, but I’ll bet your final bill is more than it would’ve been in 2020.
3) These aren’t “go for a drive” gas prices
If you’ve got a larger vehicle that tends to cost a lot in gas, stay away from any unnecessary driving. Arrange carpools for the kids, or now that the warmer weather is coming head out for a relaxing walk with your favourite tunes or podcast instead of going for that relaxing drive.
4) Think about the effect that inflation has on your purchasing power
While it may be tempting to offset some cashflow challenges with credit, remember that we’re also in a high inflation place as well, which means your dollar has less purchasing power than it did last year (or even yesterday). If you’re incurring interest by carrying debt to get you through, that’s eroding your dollars even more. If you MUST use credit, try to utilize a credit card that will give you something in return — such as PC Points for free groceries, or cash back. At least then you’ll be compensating for the interest to some degree. And if you can’t pay your credit card off in full each month, try to always keep any carried balance on your card under 30% of the total limit (let’s say you’ve got a limit of $5000, don’t have a balance owing over $1500).
5) Revisit your household budget
FAMILY FINANCE MEETING! Have a sit down to see where your costs are right now and if needed, where any sacrifices or adjustments can be made. Make adjustments that reflect your true costs TODAY and make it a regular habit to return to that cashflow management system (aka budget) more often than perhaps has been needed in the past to stay ahead of rising costs.
While this list is certainly not exhaustive, it’s a good place to start if you’re feeling a pinch in your cashflow these days.
Want to get a bit more serious about your cashflow management? I can help!