Whether it is groceries, gas, paying rent or buying a car, inflation has affected the cost of everyday needs. Finding ways to stretch your income is critical during periods of high inflation to avoid getting into debt or having to dip into savings to make ends meet. Fifth Third recognizes that customers have less purchasing power right now and offers the following tips, products and services to assist with budgeting during inflation.
Decide where you can cut back
The first step to control your spending is to create a budget that accurately tracks where your money is going each month. There are online spending calculators (like Fifth Third’s) that can show you how much of your income is allocated to essential expenses such as rent, childcare and car payments, and how much you are spending on discretionary items like dining out, travel and entertainment.
Although you may not be able to cut back on your fixed expenses in the short term, there are plenty of ways to adjust your discretionary spending. Consider cost-cutting steps such as postponing a new car purchase, eating out less, skipping that latte or buying fewer clothes.
Next, you need to decide where to reduce your expenses. Here are some budgeting tips that can help you to cut your spending:
- Cancel subscriptions to streaming services and cable TV channels you no longer frequently watch.
- At the grocery store, skip higher-priced brands in favor of private-label brands, which are often produced by the same manufacturer. Plan your meals for the week ahead and bring a list—one trip to the store saves on gas and avoids overspending on costlier convenience foods. Online grocery shopping with free curbside pickup is another way to reduce costs and prevent impulse buys— and be sure to use those digital coupons.
- If you use a credit card each month for expenses, ensure that the card rewards you and pay off the balance each month.
- Curb impulse buying by setting a waiting period, say 24 hours or more, between the time you decide to buy something and when you pay for it. Often the prospect of a little time can keep you from buying things you really don’t need.
Another way to stretch your money during a period of high inflation is to reduce the interest payments you’re paying on debt. Consider consolidating your credit card debt onto a balance-transfer credit card, which will give you a year or more at an introductory 0% annual percentage rate (APR) on the amount of debt you transfer after paying a nominal transfer fee. This will give you time to pay off debt without the interest charges—which potentially will continue to rise—and improve your credit score in the process.
For example, Fifth Third has many cards with introductory offers that have little to no APR for certain amounts of time on purchases and balance transfers. Visit 53.com/content/fifth-third/en/personal-banking/bank/credit-cards.html for details.
Have cash at the ready
Aim to build an emergency fund that can meet at least three months of your living expenses. Having sufficient savings is a critical strategy to deal with today’s higher prices. Should you need a new computer, refrigerator or car, you don’t want to sacrifice quality or go into debt to make an essential big-ticket purchase.
About Fifth Third
Fifth Third is a bank that’s as long on innovation as it is on history. Since 1858, we’ve been helping individuals, families, businesses and communities grow through smart financial services that improve lives. Our list of firsts is extensive, and it’s one that continues to expand as we explore the intersection of tech-driven innovation, dedicated people and focused community impact. Fifth Third is one of the few U.S.-based banks to have been named among Ethisphere’s World’s Most Ethical Companies® for several years. With a commitment to taking care of our customers, employees, communities and shareholders, our goal is not only to be the nation’s highest performing regional bank, but to be the bank people most value and trust.
Fifth Third Bank, National Association is a federally chartered institution. Fifth Third Bancorp is the indirect parent company of Fifth Third Bank and its common stock is traded on the NASDAQ® Global Select Market under the symbol "FITB." Investor information and press releases can be viewed at www.53.com. Member FDIC.