Cutting Back on Expenses: Our Fight Against Inflation

Today’s post was written by Jeremy, from Knocked-up Money. Jeremy is a FinTech marketer by day and a blogger by night. His blog focuses on helping parents and parents-to-be get a handle on their finances to pursue financial freedom and create generational wealth. As a parent with limited income, he practices what he preaches daily in the fight against inflation and ever-rising costs.

Hard to believe that we’re almost halfway through 2023. And what a year it has been – everything costs more! According to the April Report of the Consumer Price Index, the cost of food increased by 8.5% in March 2023 compared to March 2022. This increase impacts groceries and eating out, as many restaurants increased menu prices to cover the cost increases and to retain their staff. If you were spending $1200 per month on food in 2022, you are now paying just over $1300 per month in 2023. That’s over $1,000 more per year, on the same meals. It’s not just food though, as seen with the Social Security Administration passing a whopping 8.7% cost of living adjustment in 2023.

Now more than ever, it’s imperative to create a budget and seek ways to cut costs. As a parent with a limited supply of disposable income, this is something on my mind every day. There are three key aspects of budgeting:

1. Choose a budget strategy: There are many budgeting strategies to choose from, but my favorite to start with is the 50/30/20 budget. This budget places every expense into three categories, 50% needs (ex. Housing), 30% wants (ex. Eating out), and 20% savings and paying down debt. These categories are a starting point – I’m working hard every day to put as much as possible into the savings category so I can achieve financial independence one day. 
2. Decide on a tool to create your budget: there are many tools to choose from nowadays, everything from a trusty legal pad to financial tracking apps. I prefer using an Excel spreadsheet as it allows me to track expenses for years in one place and doesn’t give me any heartburn from a privacy standpoint. If you want to avoid the apps and don’t have time to create a spreadsheet from scratch, check out the budget planner that I created (it’s free). It’s easy to use and only takes a few minutes per month to fill out.
3. Start right away and check in often: time is of the essence, start your budget today! It’s okay if it isn’t perfect from the beginning, with everything new it takes time and practice. I’d recommend sticking with one budget strategy for a few months before switching, it’ll give you time to decide if it’s working for your household or not. Check in often with a family member or close friend – hold each other accountable and celebrate the savings wins. 

Once you’ve taken stock of your current financial situation, it’s time to figure out where to cut down on expenses. Here are my top five ways to tighten your belt this year.

1. Cook at home: preparing your meals at home is healthier and more cost-effective. The price of eating out increases every year, especially if you’re paying a ton of fees to use a delivery app. Many eateries (not all) are using lesser-quality ingredients to cut costs. Maximize your savings by planning your meals in advance and creating a grocery list (and sticking with it). This will help you be more targeted at the grocery store and prevent impulse shopping. 
2. Pay down high interest debt: high interest debt will destroy your ability to get ahead financially. If you’re only paying the minimum amount each month, you will end up paying much more than originally planned. Lenders and credit card companies make money off of customers who carry debt month-to-month. Win this battle and put everything that you can to get out of debt. Nicole has an amazing story about paying off more than $4,000 in a month, check it out if you haven’t already for some great tips. 
3. Comparison Shop: before making any purchase, take a few minutes to compare prices online and in-store to find the best deal. For big purchases, do your best to wait until a major holiday as most retailers use these times to attract customers with savings offers. I recently saved 50% on mulch at Home Depot – before hitting purchase online, I did a quick search and found an article on when their 2022 Memorial Day sales started. By waiting a day, I was able to save hundreds of dollars – well worth the time. There are a plethora of tools for comparison shopping now, including browser plugins, apps, and groups on social media.
4. Cut down on subscriptions: paying for a gym membership but haven’t been in a month? Have 5 streaming services? It’s time to cancel anything that isn’t being used often. You can always rejoin later if it turns out to be helpful to you. We try and keep only 2 paid streaming subscriptions at a time. Especially as a parent, there’s minimal free time to watch TV, so there’s no need to pay for a service we aren’t using often. It only takes a few minutes and they’re always happy to welcome you back when ready. One of the best deals out that I’ve seen is the Disney+ bundles, allowing you to tap into Hulu and ESPN as well, all for a tenth of the cost of cable. Our daughter doesn’t watch TV, but if she did, we’d allow her to watch Disney+ as they have many parent security features available.
5. Tap into your local community: your local community is full of amazing places and experiences to explore. No need for an expensive vacation this summer – act like a tourist and look for free (or cheap) activities for you and/or your kids. From museums to hiking in nature, there are plenty of ways to have fun both inside and out. There’s also a huge need right now for volunteers. Research local programs that could use an extra set of hands and help those in need and dive in – you won’t regret it. 

Keep in mind how your new budget impacts your entire household. If something is cheaper in the short term, it doesn’t mean that it’s the right decision for the long term. Fast food is a great example. While cheaper at the moment, you may pay for it tenfold later in medical bills. Bring your kids into the journey and teach them along the way. We need to prepare them for the future. Proper budgeting and cost-cutting is a great life lesson for the whole family. It’s a marathon, not a sprint. Focus on making small daily changes that can turn into a new way of life that is sustainable for the long term.