Vacations. The summer heat. Back to school shopping. It’s summertime and most families are faced with increased costs that can put a strain on their budgets. While it is tempting to spend your savings or increase credit card usage to maintain your lifestyle, using savings or borrowing for every day purchases can have serious long-term impact on your family’s financial well-being.
Before resorting to using either your savings or credit cards, consider some of the following tips to save money on everyday necessities and back to school purchases to minimize the impact on your family’s finances:
- Inventory your attitude. Sit down with your family and reconsider what is really important. You may be able to eliminate spending on certain goods and services for substantial savings. Discuss your family’s personal and financial goals to determine if your spending habits are helping you accomplish those goals.
- Shop the sales. Retailers are very aware of the crunch that buyers are facing. As a result, the number of sales is increasing. Whether you watch for weekly specials in the local newspaper ads, subscribe to a company’s email newsletter offering weekly information on their specials or rely on word of mouth, you can cut costs by watching to see what is on sale before making choices about where to shop and what items to buy. However, shopping the sales doesn’t mean recreational shopping. Instead, it means watching the specials and buying only what your family actually needs. Buying something because it is on sale is tempting, but it’s also a budget buster!
- Shop smart. Oklahoma’s Sales Tax Holiday weekend (Tax.OK.gov) is August 7-9. Clothing and shoes valued under $100 per item are exempt from tax; however, be aware that you may save more by shopping discount stores, resales hops and outlets. Watch prices and sale ads for true deals.
- Shop with a list. Whether you are headed to the mall or the grocery store, make a list of what you need to purchase—and buy only what is on your list. Having a list will help you avoid overspending or being distracted by special offers or store displays. Inventory your children’s closets. Check out their closets to see what clothing items or school supplies can be used again this fall.
- Use cash for daily purchases. Paying with cash instead of debit or credit cards when stopping for a cup of coffee or hitting the drive-thru window will make you much more aware of how much you spend each week and stick with it.
- Watch the thermostat. Pushing the thermostat up a degree or so in the summer and down a degree or so in the winter will reduce your energy consumption. A slight change in temperature will have minimal impact on your comfort level but can reduce your monthly payment—or at least hold it constant with rising energy prices.
- Make payments on time. Paying late fees, overdraft charges and other penalties add up quickly. Making your payments on time and watching your account balances saves you money and improves your credit rating. In the long run, you will have the added benefit of lower insurance rates and interest rates with a higher credit rating.
- Review your insurance policies. Increasing your deductible will result in substantial savings. The additional money can be used to pay down debt, increase your savings or offset increasing prices of necessities.
- Review your budget. If you don’t have a budget, make one and stick with it. If you do have a budget, take time to review it carefully. When prices are changing, you may need to make adjustments to ensure you are not overspending in one or more areas.
- Continue paying yourself first. When money gets tight, it is tempting to eliminate regular contributions to your saving account. Using your emergency savings for repairs and maintenance is less expensive than charging them on a credit card. Savings provide the cushion you need to survive difficult economic times.
Sue Lynn Sasser, PhD, is an associate professor of economics at the University of Central Oklahoma.