Inflation is hurting many individuals and families in the southeast Wisconsin area, with rising grocery and housing costs as well as income uncertainty. Family budgeting strategies involve practical ways to save money, how to budget on a low income, and ways of finding help. We offer these money-saving tips for families with the idea that even small, practical saving strategies can add up to more financial stability, even for those on a limited income.
A poll this year by U.S. News & World Report revealed that 40% of Americans couldn’t cover a $1,000 emergency expense with either cash or savings, and 60% said they had an unexpected expense within the past 12 months. When hit with a financial emergency that you can’t afford, it can set you even further behind if you have to sell any of your possessions, borrow from friends or neighbors, or use a credit card that can add up to significant costs if you can’t pay off the balance at the end of the month.
Tip 1: Track Every Dollar You Spend
It’s easy to lose track of how much you’re spending on different items, which is why putting together a budget is so important. It gives you the chance to take a close look at your income and expenses to see how you’re doing. Some families only do this once a year and then forget about it, but the key is to make a habit of analyzing your budget on a regular basis.
You can start by keeping track of every dollar you spend, no matter how insignificant something may seem. There are free budgeting apps available for your smartphone. You could also use a computer spreadsheet or a pen and paper. However you choose to do this is up to you. This might seem tedious at first, but people who do this can often find hidden expenses that add up to a significant amount over time.
Take-out and food delivery, impulse buys, and conveniences such as convenience store snacks or coffee shops may all seem like small amounts individually, but can add up to a substantial amount over time. Make a goal of keeping track of every expense for 30 days, just to see where you stand. Many people who do this find that it can really help them figure out ways to cut back on expenses.
Tip 2: Prioritize Needs Over Wants
When it comes to spending and budgets, we all have things that we must spend money on and things that we’d like to spend money on. It’s important to recognize the difference when looking for ways to save money. After 30 days of keeping track of your expenses, sit down and separate them between the essentials and nonessentials.
Essential items include housing (rent or mortgage), groceries, transportation, insurance, and utilities such as water, electricity, and phone bills. The Internet might count as an essential expense if you need it for work or school. Nonessential expenses include entertainment (such as streaming services), online shopping, jewelry, expensive clothes, and food delivery or takeout.
Saving on your essential items may be difficult, but it’s worth considering. If your family has several cell phone plans, you might be able to sign up for a family plan and save money. You might try to cut back on your electricity use by making sure everyone in your home turns off the lights when they leave a room. If you’ve been a long-time customer, you might ask for a discount from an insurance company or a landlord. You might ask your utility providers if they offer discounts or financial assistance.
Any real savings in your household budget are more likely to come from nonessentials. Add up your total cost of streaming services and consider how often you use them versus how much they cost. Ask yourself if you really need these services or if you simply want them. You might cancel all of them and use the savings in other ways, such as paying down debts or building an emergency fund. Try cutting other nonessentials, such as eating out and food delivery.
Tip 3: Find Creative Ways to Cut Household Costs
Try to put these budgeting tips in a positive light, as a way of teaching kids and teenagers about how to set priorities, the importance of saving money, and the need to have a monthly budget. This can help them develop a values-based approach to spending as a way to curb impulsive purchases and buying things they don’t really need.
Plan out your meals before you go to the grocery store so you know exactly what you need, which can help you avoid impulse buys and junk food. Try shopping in bulk and buying generic grocery brands rather than name-brand items. Cooking meals at home can save you a lot of money over restaurant meals and food delivery. A home-cooked meal can really stretch your dollars if you make things from scratch rather than packaged meals in a box. In many cases, they can be healthier as well.
For entertainment, try using public libraries instead of streaming services. Many libraries still rent DVDs. Your local library might also let you stream movies and audiobooks for free using services like Hoopla and Kanopy. You’ll need a library card, and you can use that to set up an account with either service.
Second-hand thrift stores, consignment shops, and nonprofits can be a great way to save money on furniture, clothing, and other household essentials.
The Salvation Army Thrift Store in Fond Du Lac offers clothing, furniture, small appliances, and household goods. The Salvation Army also offers emergency disaster relief, utility assistance, rental assistance, food assistance, back-to-school supplies, and summer camp for kids through its Fond du Lac Corps Community Center and the Oshkosh Corps Community Center.
Thrift stores in our customer service area include:
Waupun:
Fond Du Lac:
Oshkosh:
Access Aid Programs in Wisconsin
There are many public aid programs offered at the state and local levels. Here are the ways you can access them and find more information:
- Anyone in Wisconsin can call 2-1-1 at any time to seek help with housing, utilities, food, employment, addiction recovery options, and more, in more than 180 languages. You can also text your ZIP Code to 898211 or visit the 2-1-1 service online for more information or a live chat online.
- The Well Badger Resource Center maintains an online directory of more than 7,000 resources to fit many needs. This includes information on child health support and nutrition services, financial and legal assistance, health care coverage and services, plus pregnancy and parenting help.
- WISCAP is Wisconsin’s statewide network of poverty-fighting agencies. Its network operates food banks and pantries, homeless and domestic violence shelters, Head Start, and other programs.
- ACCESS Wisconsin is the state’s portal for applying for SNAP (food stamps), childcare benefits, healthcare, and childcare expenses. The website can also help you determine if you’re eligible for other types of assistance such as earned income, child, and Homestead tax credits, help with buying prescription drugs, and home energy assistance.
- ChildCare.gov offers information on federal government programs in Wisconsin, such as Temporary Assistance for Needy Families (TANF), the Children’s Health Insurance Program (CHIP), Women, Infants, and Children (WIC), SNAP (formerly food stamps) the Low Energy Assistance Program (LIHEAP), and the Child and Adult Care Food Program (CACFP).
- The Wisconsin Department of Children and Families offers information on a wide range of family and child support services.
Tip 4: Build Savings into Your Budget — Even Small Amounts Count
After keeping track of your expenses and saving money wherever possible, hopefully you’ll be left with a little bit more in your pocket or checking account at the end of each month. The question is what to do with these funds. If you don’t have an emergency fund, now is the time to create one. If you already have a checking account, you could open a separate savings account where you set funds aside just for emergencies.
Financial experts recommend that everyone have three to six months’ worth of living expenses in a place you can readily access, such as a savings account. Keeping these funds in a savings account could not only reduce the temptation of spending the money, you can also benefit from earning interest on what you save.
Take a close look at your monthly budget to figure out how much of an emergency fund you’ll actually need. If you’re single with a steady job, three months might be enough for your emergency fund. Anyone whose income varies from month to month, or has a family to support, would need a larger emergency fund.
Consider automating your savings with automatic transfers from your checking to your savings account. Even if it’s just $10 a week, that amount will add up over time and get you on the right path to financial stability.
The next time an unforeseen expense comes up, you’ll be much better off if you can dip into your emergency funds rather than having to borrow the money and pay interest. For some people, even a small expense on a credit card can create a debt trap if they can’t pay off the card in full at the end of the month, and the interest charges accumulate over time.
Tip 5: Use Extra Income Wisely
Whatever windfalls come your way, make sure you use them wisely, whether it’s from tax refunds, a paycheck bonus, a raise at work, or a side hustle. Take a look at your budget and whatever debts you may have before deciding what to do with the extra cash. In fact, it’s a good idea to already have something in mind for what you would do with any unexpected funds, to avoid spending them on something impulsive.
Try asking yourself what would bring you more peace of mind: A shopping spree or getting out of debt and building a financial reserve?
We recommend paying off your debts before you think of any lifestyle upgrades. Eliminating or reducing the interest charges on an outstanding loan would be far more beneficial to your bottom line and the financial health of your family. If you’ve paid off all your debts, you could use the funds to build your emergency fund and earn more interest in your savings account.
Once you do build a substantial emergency fund, you might consider placing some of it in a money market account or investing in a certificate of deposit (CD) to earn more interest. Many of our customers keep some of their savings in a regular savings or money market account, and part of it in CDs with different terms. This way, they can access some of their savings whenever they need, while waiting for the funds from a CD to be available when it matures.
Small Steps Build Big Security
Financial progress is possible, even on a tight budget. By making most of the resources available to you and your family, and saving as much as possible, you can put yourself on the path to improving your financial security. Remember to take the time to celebrate every win, such as saving $50 a month. A little celebration with your family (that doesn’t break the budget) can help you remind each other about the importance of saving and to keep your financial goals in mind. At FVSBank, we’re here to help you every step of the way. If you’d like to open an account, please stop by one of our locations in Fond du Lac, Oshkosh, or Waupun, or contact us online.