Brad Unger entered financial services as a teller 21 years ago, working his way up to banker and later mortgage lender. He now serves as branch manager at the new OnPoint Springfield Branch located in the Fred Meyer.
SPRINGFIELD – In my job managing a community credit union branch in Springfield, I have the privilege of helping individuals from all walks of life. From small business owners to retirees to kids opening youth savings accounts, we help people through some of life’s highs and lows, like buying a first home or navigating a job loss.
In recent weeks, I’ve seen how changes in inflation and interest rates are hitting the budgets of the families and people we meet and have come to know. Eugene saw an increase of 6% on the prices of goods and services between October 2020 and October 2021. Nationally, house prices increased by 18.5% between August 2020 and August 2021, and the low interest rates we’ve grown accustomed to are beginning to creep back up.
Whether you’re adjusting to rising inflation or managing an unexpected life event, having an emergency fund can make all the difference. In my 21 years of working in financial services, I’ve learned that these simple steps can help you prepare for the unexpected:
Create a monthly budget – and stick to it. Begin by calculating your monthly income and subtracting your expenses. Inflation can make budgeting tricky, but staying up-to-date on the latest shifts in consumer prices will help you avoid unpleasant surprises. Follow the Bureau of Labor Statistics on Twitter to better inform your expense calculations. Review your spending habits frequently and make adjustments when needed. This will enable you to live within your means.
Now that you know how much you spend each month, set an emergency fund goal. Aim to accumulate three to six months’ worth of basic living expenses. This may sound intimidating, but you can start small and build up. Determine an amount that you can comfortably set aside from each paycheck, even as low as $50-100. Then add $10-20 here or there. You’ll be surprised how quickly small contributions add up.
Evaluate your expenses for savings opportunities. Look for subscriptions or other expenditures that aren’t necessary and make cuts where possible. Find a more affordable cable plan that only includes the channels you watch. If you have a gym membership you don’t use, take the time to cancel it. Cut back on dining out. Reevaluate your cell phone plan. For each expense you reduce, earmark the savings for your emergency fund.
Consolidate or refinance higher-interest debt to free up money for your emergency fund. Interest rates are rising, but you may still be able to reduce your monthly payments. Make a list of your debts, starting with the highest interest rate. Then, contact each creditor to explore your options for refinancing to a lower fixed rate. Where refinancing isn’t an option, transfer your balance to a lower-rate credit card, and try to pay off the balance before the promotional rate expires.
As the parent of a diabetic daughter who requires ongoing medical care and treatment, I understand how difficult it can be to create a workable family budget.
But over time, even small changes will add up, providing you with a cushion that will greatly alleviate your stress should you or your partner lose a source of income.