70% of Americans Label Economy ‘Poor’: 10 Ways To Save Money in a Bad Economy
In a recent LinkedIn post, Simon Ateba highlighted stats from CNN showing that 70% of Americans believe that economic conditions in the country are poor. Even though the inflation rate at the end of April was at 3.4%, interest rates are still high as the Fed hasn’t started cutting them yet.
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While some analysts believe there could be several rate cuts in 2024, we won’t know how inflation and employment numbers will be over the next few months. With the April jobs report showing that 175,000 positions were added, many experts are worried about the impact of higher rates on corporate earnings.
Regardless, how you view the economy typically depends on your personal situation. But with so many Americans perceiving the U.S. economy to be in a poor state, here we will review 10 different options for saving money when things are down.
Reevaluate Your Budget
When trying to save money, you want to ensure that your budget reflects the current conditions as prices have increased. You want to be realistic about the financial situation and plan accordingly.
“Reevaluating your budget regardless of the economic cycle helps you ensure your spending reflects your current financial picture and goals,” said Michael Adocchio at UMB Bank. “Set aside time each month to analyze your current income, expenses and reoccurring bills.”
When listing your expenses, you’ll want to categorize them as either mandatory (rent or utilities) or discretionary (eating out or subscriptions) so that you know what you should be working on.
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Analyze Small Ways To Trim Your Expenses
As you adjust your budget, you’ll want to find any expenses you can cut or reduce to save money and improve your bottom line.
“Set aside time to evaluate your spending history and identify areas where you could cut back and redirect those dollars into your savings,” noted Adocchio.
We all have at least one problem area that needs to be addressed, and the current economic state is a good reason to make positive improvements.
Don’t Eat Out Frequently
According to the U.S. Department of Agriculture, Americans spent over 11% of their disposable income on food in 2022. With take-out food prices going up over 25% since the pre-pandemic days, dining out often can make it difficult to save money.
“Fancy food purchases made with a credit card are examples of wasteful consumption,” said Ganesh Pandit, an associate professor of accounting at Adelphi University.
Most financial experts will agree that eating out too often will make it challenging to save money during difficult financial times. You’ll want to address this area if you feel the economy is in bad shape.
Stop Spending on Lavish Products You Don’t Need
While you may feel inclined to treat yourself occasionally, the reality is that during difficult times, it’s essential that you prioritize necessities over wants.
“Personal items such as designer brand clothing, handbags and purses, and accessory items that are purchased purely for showing-off and not because they carry any special utility should be cut,” noted Pandit. “Items of a lesser brand with similar appearance and similar quality that provide the same level of utility and comfort will save you a lot of money.”
Limit Your Subscriptions
“Memberships to expensive gyms and subscriptions to a monthly supply of products and services can accumulate credit card debt if it goes unnoticed,” shared Pandit.
When reviewing your budget and expenses, you should focus on eliminating subscriptions that can improve your bottom line.
Adocchio added, “Reach out to your insurance provider to see areas you can cut back on regarding aspects of your medical, car, and home insurance you’re not using.”
The good news is that you can cut an expense for a few months while you focus on building up your savings.
Search for Coupons and Get Creative About Saving
You can find a variety of coupons and discounts online, especially with all the apps focused on helping you save.
Adoccio elaborated, “If filling up your gas tank is draining your wallet, consider checking to see if your local gas stations or grocery stores offer loyalty or reward programs.”
Make Smart Investments
If you’re worried about the state of the economy, you can capitalize on the situation by investing your money in stocks that have dropped in value lately.
“When the market is down, you can use income to buy stocks at lower prices than you would otherwise get them,” shared Scott Lieberman, founder of Touchdown Money. “Buying low has always been a sound strategy to win in the long run.”
Plan a Major Purchase in Advance
According to Adocchio, you can get ahead on major purchases by setting up an automatic transfer. If you’re looking to make a significant purchase like a new vehicle or a wedding, you want to ensure that you have the funds for it so that you don’t rely on credit cards.
Adocchio shared a specific example:
“If you have something specific you are saving money for, like a car or a down payment on a house, you can create a savings account with the help of your bank that is specific to that goal. Then, set up an automatic draft to that account out of each of your deposits. It can be as little as $5 a deposit, but you’ll be surprised at how much easier it is to sock money away when it’s happening automatically.”
Delay a Major Purchase
If you’re struggling to make ends meet, consider delaying a major purchase by a few years. For instance, you could take public transit as you save up for a new vehicle or delay your wedding by one year to save up as the economy improves.
Start a Side Hustle
While you can’t control what happens in the economy, you can control how you handle your daily life and your actions to improve your financial situation. One of the best things you can do for your bank account is start a side gig to get more money coming in.
You can tap into the gig economy by performing odd jobs on TaskRabbit, delivering food through Uber, or offering freelance services on a platform like Fiverr to boost your income so you can also increase your savings.
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This article originally appeared on GOBankingRates.com: 70% of Americans Label Economy ‘Poor’: 10 Ways To Save Money in a Bad Economy
