Money Management

It may be time to rethink your spending. 

Rampant inflation has been with us since the mid-2021. And it’s forcing consumers to make hard choices.

For some, that’s meant cutting back on leisure spending. For others, it’s meant downsizing to a smaller home or moving back in with parents as an adult.

But it’s not just low- and even average-income consumers who are making changes because of inflation. In a recent survey by Edelman Financial Engines, 80% of respondents have been forced to adjust to rising living costs, and 49% have coped by purchasing fewer things for themselves. Meanwhile, 46% have cut back on entertainment and recreation spending, and 42% have slashed their food costs.

That same survey found that even affluent respondents — those with household assets between $500,000 and $3 million — have made changes to cope with inflation. In fact, 75% of people in that category say they’ve made some type of financial sacrifice in the wake of higher living costs.

If you’ve been struggling to pay your bills recently, to the point where you’ve been racking up credit card debt or raiding your savings account consistently, then it may be time to employ some cost-cutting measures yourself. Here are a few worth considering.

1. Stop dining out and ordering in

Eating at restaurants and ordering takeout can be a treat. And when you’re pressed for time, the latter can sometimes seem like your best option.

But prepared food tends to come with a really high markup. A meal you order from a restaurant that costs you $40 might cost just $10 if you were to prepare a similar sized portion in your own kitchen. So as much as it might pain you to have to spend more time shopping for groceries and cooking, if money has gotten tight, it pays to make that effort.

2. Limit yourself to local travel

Travel has gotten expensive over the past year and change. If you’ve been having a harder time paying your bills, it may be time to cancel travel plans that have you boarding a plane and leaving the country.

Instead, consider staying local the next time you’re entitled to some days off. Explore your own city, or take the opportunity to relax, unwind, and tackle home projects that can improve your quality of life.

3. Give up a car you no longer need

Maybe you needed a vehicle when you were reporting to the office five days a week. But if you’re now working remotely, your car may be more of a luxury than a necessity. And in that case, it pays to consider unloading it. You might save a bundle by not having to pay for auto insurance and maintenance.

Cutting back on spending is not an easy thing to do. But at a time when inflation is surging, it may be necessary. If you’ve seen your personal financial situation take a turn for the worse, it may be time to make some sacrifices so you’re able to get a more financially stable place. After all, even the wealthy are doing that.

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States are helping in a small way by sharing budget surpluses. 

Just when you begin to think stimulus checks are a thing of the past, something new pops up. A state decides to send checks to year-round residents, or a congressional contingent fights to renew the expanded Child Tax Credit. Whether it’s due to decisions made by state legislators or members of Congress, it’s not quite time to put the final nail into the coffin of stimulus payments. Here are states still in the process of sending more stimulus funds to residents’ mailboxes and bank accounts between now and early 2023:

California

An estimated 5% of eligible Californians are still waiting on their promised California Golden State payment. Payments of up to $1,050 are expected to be sent by the end of January.

Colorado

Coloradans who submitted their last tax returns late are also waiting on stimulus checks. In this case, payments of up to $1,500 for joint filers or $750 for single tax filers are expected to be sent out by the end of January.

Idaho

Full-year Idaho residents for 2020 and 2021 who filed income tax returns for those years are also due money. In this case, joint filers can expect $600 or 10% of their 2020 income taxes, whichever is greater. Single filers will receive $300 or 10% of their 2020 income taxes, whichever is greater. Also receiving the rebate are those who filed Form 24 to get the grocery credit refund.

According to the Idaho Tax Commission, it is issuing about 75,000 rebates per week. In order to be eligible, residents must file those tax returns by Dec. 31, 2022.

Illinois

An income tax rebate of up to $400 has already been sent to some residents with a 2021 Illinois adjusted gross income (AGI) under $400,000 for joint filers and $200,000 for single tax filers.

In addition to this rebate check, Illinois residents who paid Illinois property taxes in 2021 on their primary 2020 residents are receiving a property tax rebate of up to $300. To be eligible, the resident must have an AGI of $500,000 or less for joint filers and $250,000 or less for single filers.

However, not all checks have been distributed, and funds continue to hit bank accounts throughout this month.

Maine

In Maine, $850 COVID Pandemic Relief Payments ($1,700 for married couples) continue to be distributed this month to eligible residents who waited to file their 2021 tax return until Oct. 2021. Eligible single recipients must have a 2021 AGI under $100,000, and head-of-house filers must have a 2021 AGI under $150,000. The eligible AGI for joint filers and surviving spouses is up to $200,000.

New Jersey

Homeowners in the Garden State are scheduled to receive a payment of up to $1,500 by May of 2023. Renters can expect to receive up to $450 in rent rebates.

Pennsylvania

Pennsylvania residents have up to the end of this month to apply for a property tax or rent rebate. The rebate is as much as $650, although it’s boosted to as much as $975 for certain senior citizens. Here’s what it takes to be eligible:

65 years old or older.Widow or widower at least 50 years old.A person with disabilities who is at least 18 years old.An annual income of $35,000 or less (for homeowners).An annual income of $15,000 or less for renters (50% of Social Security benefits are excluded).

Payments are due to be received into 2023.

Rhode Island

Families who qualified for a child tax rebate this year are set to receive $250 for each child 18-years-old or younger at the end of 2021. Families can collect $250 for up to three children, for a total of $750. While families who filed their Rhode Island tax return by Aug. 31, 2022, began receiving checks in October, residents who filed by Oct. 17 should receive payment this month.

To be eligible, a couple filing jointly must have a 2021 AGI of $200,000 or less. All others must have an AGI of $100,000 or less.

South Carolina

South Carolinians who filed their tax returns by Oct. 17, 2022, are due a payment of up to $800 by the end of this month. Those who file an extended return by Feb. 15, 2023, can expect payment sometime in March 2023.

As states seek ways to ease the burden of higher rents, increased property taxes, and any residual effects of the pandemic, sending checks is one small way to help.

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Find out what SNAP benefits different households are entitled to. 

The Supplemental Nutrition Assistance Program (SNAP) has helped hundreds millions of American households put food on the table since it started back in 1939. It’s gone through many changes since then, particularly in recent years. For example, in 2021 the USDA updated the way it calculated maximum benefits — resulting in a significant boost to SNAP payments across the board.

SNAP benefits are adjusted each fiscal year, based on any changes to the cost of living. On Oct. 1, 2022 the maximum monthly payment for a family of four increased by 12.5% to $939 for the 2023 fiscal year. It won’t change again until next October. Assuming the cost of living continues to increase, we can expect a further SNAP increase then.

Maximum SNAP payments for 2023

To calculate SNAP benefits, local agencies take the maximum benefit for that household size and then make deductions depending on income and other factors. Eligibility depends on a household’s income and total assets. Income generally needs to be at or below 130% of the poverty line.

Your household size, the state you live in, total income, and other living costs all play a role. Without getting into too much detail, benefits are calculated on the assumption that a family spends 30% of its net income on food. That gets deducted from the maximum payment. As a result, many households don’t receive the maximum amount.

According to the Center on Budget and Policy Priorities (CBPP), the average monthly payment for a household of four in 2023 will be $718 — over $200 less than the maximum benefit of $939. Residents of Alaska, Guam, Hawaii, and the Virgin Islands receive higher payments due to the higher food costs in these states.

Here are the maximum payments for 48 states and the District of Columbia:

Why some households could receive lower SNAP payments in 2023

Unfortunately, some households will receive less money next year. Emergency provisions connected to the COVID-19 health emergency have allowed states to pay extra benefits since March 2020. These emergency allotments mean SNAP families can receive the maximum benefit for their household, and those already receiving the maximum receive an additional $95.

Many states have already ceased to pay emergency allotments. Those that continue to do so will have to stop when the federal government ends the national health emergency. It isn’t clear yet whether the health emergency will stay in place beyond Jan. 2023, but it will almost certainly end at some point next year.

The CBPP said, “Households are seeing a large increase in SNAP benefits in October 2022 to account for higher food prices, but most SNAP households will see a substantial cut in their benefits, likely later in fiscal year 2023, when emergency allotments end.”

How to make your SNAP dollars go further

Rising living costs have put a huge strain on the bank balances of many Americans, particularly lower-income households. Data from the Bureau of Labor Statistics shows the cost of food at home was over 12% higher in October than the previous year. The increase in SNAP benefits goes some way to helping families keep up with higher grocery costs, but if prices continue to rise next year, your money — SNAP or otherwise — simply won’t go as far.

If your state offers any Double Up Food Bucks programs, this can be a great way for SNAP recipients to get more fruit and vegetables. Essentially each dollar is worth two dollars at participating farmers markets and stores. You’ll get double the amount of produce and be able to access healthier food for your family.

Several cash back apps will work with your SNAP EBT payment card, so you can earn rewards on your spending. Check the app before you go to the store for any offers or bonuses that might fit with your shopping list. Keep the receipt, as you’ll need to scan it to claim your rewards.

In the chaos of day-to-day life, it can be hard to make time for planning. But it can really help to cut food costs. For example, if you collect coupons, planning ahead helps you use them before they run out and get the best bargains. If you know you need laundry detergent, you can hunt for a good discount online. A shopping list will also minimize the number of trips you need to make to the store, and ensure you buy everything you need to feed your family.

Bottom line

This year has been difficult financially for many Americans. The increase in SNAP payments for the 2023 fiscal year, along with the emergency allotments still being paid by some states, has eased some of the financial strain. All the same, some families are finding it hard to keep food on the table.

If your household is struggling, don’t be afraid to seek additional help from food pantries or other programs. There may be a lot of uncertainty about what will happen to the economy in 2023, but there are also a number of initiatives designed to reduce hunger and food insecurity.

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How does your savings account balance stack up to that of your peers? 

Saving money is crucial to your financial well-being. You need to have money set aside in a high-yield savings account for short-term needs such as potential emergencies or purchases you are likely to make soon. You should also have long-term savings invested in a brokerage account so you can earn returns that help you grow your wealth.

The good news is, many people have been saving more during the COVID-19 pandemic. Plus, many of those individuals who have increased their savings rate report that they intend to continue setting aside additional funds going forward, even though the average amount of savings among American households has ticked down in 2022 compared with the prior year.

So, just how much does the average American have saved? Here’s what you need to know.

The average amount of personal savings in the U.S.

According to the Northwestern Mutual Planning and Progress Survey for 2022, the average amount of personal savings in 2022 came in at $62,000. This is a considerable decrease from the $73,000 average amount of personal savings reported on the same survey in 2021.

It is something of a surprise that personal savings balances went down this year, especially given that the same research showed 60% of people said they had been able to build up their personal savings over the previous two years and 69% of those individuals indicated that they intend to continue to save at the same elevated rate going forward.

The pandemic actually helped many people develop more positive savings habits. How so? Government stimulus money offered some extra cash, and lockdowns and travel restrictions made it more difficult to spend money on entertainment and other discretionary expenses.

Since these restrictions have been lifted and since the government handed out less stimulus money this year, these two factors alone could help explain why personal savings balances are not as high as they were in the recent past.

What should you do if your savings falls short?

If you have far less personal savings than the average, don’t be discouraged. Averages can be increased by people with very large amounts of savings, so remember there are probably many people who are in your same position or who have even less saved than you do.

While you shouldn’t get upset if your balance is lower than you’d like, you should be proactive in trying to change that. To do that, make a commitment to treat saving as a priority. You can, and should, set clear financial goals, determine how much you need to save each month to achieve them, and make this a “must-pay” bill when you set a budget.

If you treat your savings as essential, just like rent or your mortgage and food, you’ll be less likely to put it off until the end of the month when you have nothing left. In fact, once you’ve decided how much you want to save, you can set up an automatic transfer of the funds directly from your bank account on payday so the money gets where you need it to. This is a surefire way to bring your savings account balance up so you can equal or exceed the averages.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Could Dollar Tree decorations help you create beautiful festive displays? 

Decorating my house is something I really enjoy doing. In fact, as the seasons change, I usually try to switch out my decor. So, for example, I have Christmas decorations up in December; Valentine’s themed items around in February; patriotic decor during the Fourth of July, and so on.

I could spend a fortune buying customized decorations for every single season, but the good news is, I don’t have to give my credit cards much of a workout in order to make my home look festive. I just head over to the Dollar Tree.

Here’s how I make my home look great each season with Dollar Tree items alone.

I focus on decorating key areas

The Dollar Tree has tons of seasonal decor items including signs you can hang up, placemats, small tabletop accessories, and even festive dishes. But it doesn’t have a lot of big decor items. So, rather than trying to decorate entire rooms throughout my house, I’m strategic about what I change out.

I usually buy Dollar Tree items for the mantles in my great room and sunroom, for example. And I’ve purchased dishes and placemats so my kitchen and dining room can be in on the seasonal theme as well. By changing out just the decorations on my mantles and tables, I can give the entire room a fresh seasonal look without switching out more expensive things like blankets and throw pillows.

I shop for seasonal items early

Although the Dollar Tree offers lots of festive items, the best things can sell out quickly. This means that I stop in the store regularly. As soon as the store switches over to holiday decor, I buy the items that I’m interested in. While this means I’m often purchasing Christmas stockings in October, I just store them in my basement so I’m ready when the time comes to put them up.

I get creative and crafty

The Dollar Tree not only offers many great pre-made decor items, but there are also tons of materials for crafts as well. For example, it’s possible to dress up Dollar Tree items to make beautiful wreaths and centerpieces and wall hangings.

Pinterest provides plenty of inspiration for how you can take a Dollar Tree item and make it much fancier and more expensive looking, so I regularly check out the craft ideas there. I also try to look at everything in the store with a fresh eye for what I can turn it into. For example, I was able to buy some clear stones and enlist my son to help me paint them red to use as part of a centerpiece for Christmas and for Valentine’s Day.

By shopping early on to get the best decor and materials, being strategic about where I place the decorations that I bought, and putting in a little effort to get creative and turn simple items into beautiful displays, I’ve managed to make sure my house is always changing its look to match the current time of year. And I’ve been able to do it without busting my decor budget.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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