If there's one thing we can all bond over right now, it's the fact inflation is literally whooping our ass!
It seems like every time I turn around, life is getting more and more expensive. I mean, in May 2022 inflation rose to 8.6% marking a 40 year high. I mean, what more proof do you need than when you're filling up your gas tank?!
And while I know the internet likes to yell, "Stocks are on sale! Stock up!"...I could honestly care less.
In fact, I've recently gone back to my budget to decrease the contributions going towards investments. Here's why.
Why I Decreased My Investments
Ok look, coming from me you know it’s bad because I’m a very goal-oriented person. But, once again, inflation is at a record high, and we’re still in the midst of a pandemic.
We really don’t know what we’re going into so the best way to protect my finances is to shift to maintenance mode. As in simply working to maintain the progress I’ve made up to this point.
I've stepped outside of my typical "go-getter" persona because it comes with too much risk right now, especially being a single mom.
When you're head of household and something goes wrong, it’s up to you to fix it right?
IDC that stocks are on sale when I have to hold up my household right now. Earnings that I will get 10+ years down the line are not going to feed us right now or keep us from losing the roof over our heads.
If you're wondering, how do I maintain what I've accomplished financially? The best thing is to build your savings!
How Much You Should Have Saved
Now the amount that you need to save will depend on your expenses, your liabilities (like if you have an old car that may break down) and obviously your income.
When calculating the amount you need to save, take into consideration things like:
- Possible layoffs. Yes, I know this is something we HATE to think about but the truth is companies are looking for ways to reduce costs and sadly job positions are a big part of that.
- Stagnant wages. Mhmmm. In a sense, it's like many are taking pay cuts because our pay no longer reflects the increasing cost of essentials.
- High interest debts. The last thing you want to do is default on your payments and get gobbled up by interest.
Trust me when I say that now is not the time to NOT have a savings. This is your safety net.
If something goes wrong, this is what you have to back you up. You pull from this so that you don’t have to go into more debt and therefore knock yourself back on your goals.
Personally, I'm focused on adding an additional $8000 to my emergency fund.This is because I was once at 8 months but obviously with everything going up it dropped to roughly 6 months and that just doesn't cut it.
Posts to check out next!
5 Ridiculously Easy Tips to Stop Spending Money on Fast Food!
Lifestyle Creep: What Is It and How to Easily Avoid It!
Teaching Kids About Money! 4 Tips from a Single Mom
9 Things That Are Making You Broke – That You Don’t Realize!
No Big Purchases
Another thing I’ve been doing to help build my savings during this time is purging. Purging my home and purging my mind of things that I WANT but not necessarily need.
I'm a recovered emotional spender and with inflation busting my budget I feel I'm on an emotional roller coaster somedays. So I'm being intentional about not making any large purchases using the same strategies I teach in my Emotional to Controlled Spending course!
While on my debt free journey, I often sold things that were sitting around my home unused. Now, my daughter and I have been putting up things on Mercari and we’ve made a few sales so far.
You’d be surprised the pile of dough you’re sitting on when you just let things clog up your space that have no purpose in your life!
No one knows when the wrath of inflation will calm down, so it's important to make sure you can maintain what you've accomplished financially. Even if that means missing out on stocks being on sale!
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