Over the last couple of years inflation has risen, increasing the cost of our day-to-day expenses. We can definitely feel the burden of spending on the same things, but having less money left over to save. This can cause worry as we feel uncertain about our financial plan and future. At Willow Planning Group, we believe in cash flow planning, knowing what your income is and creating a spending plan to be able to save!

It is important to create a budget and track expenses, at least for the first few months. This will help identify areas where spending can be reduced and help prioritize savings goals. In the mathematical equation, income minus expenses equals money left to save. This means you can either increase income or decrease expenses to have a higher amount of money to focus on goals. However, if your income has stayed the same, but costs of goods and services are rising, we can find ways to lower expenses without sacrificing the things we love. Here are some ideas:

• Focus on the fixed expenses, which will be constant month to month. Ways to decrease utilities: turn off the heater more often, lower water heater temperature, turn off lights when you leave the room, unplug unused things around the house, and take shorter showers. Insurance expenses can really add up! Try shopping around for lower cost insurances for your home or auto. Look at your recurring subscriptions, consider if they are worth the money.
• Make a grocery list. Avoid over shopping and try making more meals at home. We found this list of apps to help prepare for grocery outings.
• Evaluate your living situation: Is there an opportunity to refinance your mortgage, or if renting, consider moving to a lower rent apartment?
• Adjust current savings. A temporary reduction in retirement savings when expenses are high is OK, with a plan that helps ease cash flow and achieves other financial goals. Adjust your plan for increasing savings again after a period of time.

Looking at these details is essential to learning where your money is going and will help you make the best decisions going forward. If you are able to save even $50 per week, that is $2600 per year that can go towards investing, a vacation, or a down payment for a home! Watch this video to learn more about where to stash your extra cash!

Katerina Logrono is a Paraplanner at Willow Planning Group, LLC. She is primarily responsible for supporting you in reaching your personal financial goals. Katerina loves exploring new places while helping you live your adventure too!