Americans have not only started buying less, but they’ll also buy fewer items across more categories should inflation persist, according to one survey from CNBC and Momentive.
Higher income consumers are also cutting back on their spending. The rising concerns surrounding inflation has left many to reconsider their travel plans and other luxury investment plans.
However, with some careful budgeting and considerations, you can find a way to make room for extra spending. This spending may come in the form of a trip abroad or a new vehicle.
Adjusting Your Budget
Economists and financial experts agree that higher prices will likely last well into next year, if not longer. With that in mind, adjusting your budget and spending plans to help cope with the rising cost of everyday items can make a difference. This can even make room to save for extra spending.
This can be done in a variety of ways, such as sticking to a meal plan and cutting out expenses. These changes can be simple and easy – like opting to make dinner or coffee at home vs. going out. CNBC notes that shopping wisely by cutting out brand-name items and opting to shop at a discount grocery store and buying in bulk can help. Also, be sure to check in on your budget weekly as this can really help navigate inflation.
In addition to making changes to your everyday budget, further adjustments can be made to your extra spending plans. If you’re looking to book travel, reassessing your plans and cutting back where possible can help make things less pricey.
Opting for flexible dates and searching for cheaper tickets is just one option. Booking in advance is another way to save. Cutting back on unnecessary expenses can save even more money. These expenses may be top of the line restaurants or first class experiences. Altering your vacation plans altogether can make for an affordable alternative.
In fact, 58% of Americans planned to vacation closer to home this summer to beat out inflation and rising gas prices, according to Outdoorsy’s Vacation on a Budget survey.
Weighing Various Financing Options
When looking to invest in ‘extras’ such as a new vehicle, looking at alternative options is smart. Consider buying used, leasing or even borrowing. These are all ways that can save you from having to make a major purchase which can have a huge impact on your spending plans and budget.
For instance, if you want to spend the summer boating or camping in an RV, renting may make more sense than buying one outright. A purchase alone would involve additional costs, such as maintenance and storage. When alternative solutions aren’t an option or allotting a significant amount of money to a luxury item or experience all at once is simply too far out of reach, there are financial options to consider.
When looking to finance luxuries like a boat, exploring various types of boat financing options will allow you to make the best decision for you and your needs. Secured loans, for instance, offer a solution that is similar to a loan that one might have on a car, and the boat acts as collateral.
Unsecured loans are another boat financing option to consider. You should be aware that these will require a high enough credit score in order to take one out. They also generally come with higher interest rates than other options. Meanwhile, home equity loans and credit cards offer additional financing options. However, it’s important to keep in mind that any borrowed money will need to be paid back. Forbes Advisor notes that if you can’t afford the monthly payments, or the loan is for something that you don’t need in the immediate future, avoiding a personal loan. You can at least wait until you have more cash on hand is worth considering.
Inflation Doesn’t Have to Derail Your Spending Plans
Inflation has affected the budgets and spending habits of many this year. It has made the idea of going on vacation or investing in a luxury item seem out of reach. However, by making smart adjustments to your budget and extra spending plans and considering financing options, you can help keep your plans on track.