Budgeting for Increased Price of Gas and Groceries

How much is gas by your house? I couldn’t believe my grocery bill the other day! The increased price of gas and groceries has become a popular topic of conversation lately. These spikes can make people feel powerless and financially overwhelmed. Don’t worry. There are steps that you can take to help you get a handle on your finances.

First, how familiar are you with your current expenses? Do you know how much you spend on groceries, gas, entertainment and other expenses each month? If not, start by tracking all of your expenses for a month (if that’s overwhelming, try a week). You can keep track of your expenses by saving all of your receipts, recording all of your purchases in a notebook, or through a free budget app. At the end of the time period, put all of your expenses into categories. Notice if anything surprises you. Are you spending money in a way that is consistent with what you value? Is there a category that you could cut back on? 

Now you (and any other household decision makers) can create your monthly budget. There are a variety of aps, websites, and  worksheets that can all help you create a budget. If you like apps or websites, you may want to look into Mint, EveryDollar, or NerdWallet.  If you prefer worksheets, you may like Extension’s Monthly Cash Flow Worksheet on page 3 or the Federal Trade Commission’s Make a Budget

Once you have a budget, confirm that all household decision makers agree to the budget and are on board. Throughout the month, do your best to stick to the budget. If you do go over in one category, try and spend less in a different category. At the end of the month, sit down and discuss how it went. Does your budget need any changes? Is there anything happening next month that might affect your budget? Adjust it accordingly.

If you find that you are not able to pay all of your bills, you may have to prioritize them. It is recommended to pay housing related bills first, as failure to pay these can result in loss of your home. Then pay basic living expenses (groceries, medical insurance) and the minimum to keep the essential utility service. Read Extension’s Dealing with a Drop in Income resource for: where do you start if you can’t pay bills, deciding which debts to pay first, and for a sample letter to creditors. 

Remember that you may also be eligible for assistance. You can call 211 or visit https://211wisconsin.communityos.org/ to get help with food, rent, child care, utilities, healthcare, and mental health.

Visit Extension’s Financial Education Website for more timely information on ways to Cope with Rising Prices, Cutting Back and Keeping Up When Money is Tight, and Dealing with a Drop in Income.

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