By Sharon Epperson and Michelle Fox -
CNBC + Acorns
Inflation continues to rise and does not appear to be going down anytime soon.
Consumer prices skyrocketed in September, increasing 5.4%, reaching their highest level in 30 years.
That means you
are paying more for energy and housing, as well as food and other goods
.
Now that the holidays are approaching, pay more attention to how you are spending your money.
"Due to the holidays, people may feel even more inclined to buy, so you should be more aware of advertisements and pressure from the media to spend," recommends Jamila Souffrant, creator of the financial education podcast
Journey To Launch.
What's behind the rise in food prices in the United States?
Sept.
12, 202101: 48
Here are four strategies to stay the course. 1.
Assess the situation
Before opening your wallet, take a look at your overall financial situation.
That can help you determine which parts need more attention and where you have a little room to relax.
Add up your assets
, including what you have in checking, savings, investment and retirement accounts, plus the estimated value of your home or any property you own.
Then
add the value of your liabilities
, such as card balances, student loans, mortgages, and auto loans.
The answer to this equation is the current state of your finances:
assets - liabilities = equity.
2. Modify your monthly budget
Use the budgeting strategy called the
"60% solution
.
"
The first 60% of your gross income (all money you receive during the month) goes towards
“mandatory expenses”
which include all taxes, housing costs (rent, mortgage, utilities), card bills credit and everything else you have to pay each month.
More than 53 million people will travel for Thanksgiving despite the price of gasoline
Nov. 10, 202100: 51
The next
30% goes to savings
: 20% long-term and 10% to short-term savings, such as an emergency fund or for a major purchase ahead.
The
remaining 10% is "fun money"
to spend on whatever you want.
3. Rethink expenses
Now that the holidays are approaching, it's a good time to have a heartfelt conversation with your family, Souffrant notes.
"Play secret friend or agree not to buy gifts for everyone and to get names out of a hat," he
advises.
For any purchase, try to buy in bulk so that you are not constantly spending while prices continue to rise.
If you don't need that many items, consider forming a mini cooperative and dividing the cost and products among family, friends, and neighbors, Souffrant suggests.
[This is recommended by experts to yield the money during the historical inflation that hits the country]
If you travel by car, consider carpooling with others to lower your gas cost.
To cut total spending, review what gives your life meaning and write it down.
Next, take a look at your expenses and see if there are items you can do without.
One option is to
cut at least one recurring expense and save what you would have paid
.
You may not need six
streaming
services now
, so you can narrow it down to three.
Save that “extra” money in a special account for new whims or new priorities.
An expert gives some tips to save gasoline and face rising prices
Oct. 25, 202103: 16
4. Be aware of your emotions
You may want to treat yourself to enduring the pandemic, but
before you splurge, analyze your purchase
before you even put it in your cart, recommends financial therapist and trainer Carrie Rattle, CEO and founder of
New York-based
Behavioral Cents
.
Ask yourself if you already own one, how often you're going to use it, and if you've compared the price to other similar items, he suggests.
You may also be afraid of losing it due to supply chain shortages, especially when it comes to holiday shopping.
That can make you want to shop immediately to make sure you get all the gifts you want this holiday season.
One option to optimize your finances is to cut at least one recurring expense and save what you would have spent. DRAKULA IMAGES / Getty Images
"The scarcity mentality can induce a level of purchases beyond what is necessary, insuring all those items 'just in case' without thinking of a plan," says Rattle.
Instead,
take some time to think about what you want to buy the most, and keep a backup item or two in mind
in case you can't get your first choice.
You might also end up making some Christmas gifts a little late for the understanding adult friends and family.
"It relieves anxiety and fear and helps you think a little more rationally to protect your hard-earned money," explains Rattle.
This article is part of the
Invest in You Ready series.
Set.
Grow
(Invest in you: Ready. Done. Grow), an initiative of CNBC and Acorns, the microinvestment app.
NBC Universal and Comcast Ventures are
Acorns investors