WICHITA, Kan. (KWCH) – In the past two pandemic years, the financial dynamics for many people have shifted. For some, it is allowed for a chance to add to savings, while others faced more challenging times.
One thing that continues after those nearly two years is uncertain.
Meritrust Credit Union Director of Financial Wellbeing Chris Wolgamott said, “I think what a lot of people have seen in the past two years is that none of us have a crystal ball. It’s really difficult to plan.”
Wolgamott suggests starting with the basics when looking at your finances. Often the first step is to address stress.
He said, “With everything that’s gone on, there comes a certain stress with your finances as well.”
Wolgamott also said to account for where your money is going.
As this pandemic has been ongoing, things have changed.
“Receiving stimulus checks, that was a great way for people to save money.” Wolgamott said, “Now, we’ve been in the pandemic for a while, and that saves is running out a little bit, so people are becoming more aware of what they’re spending every month and are spending a little bit differently than they used to.”
If spending with credit became the primary way to make ends meet, Wolgamott said it’s essential to work through that.
“If you’ve accumulated debt, it’s really important that first and foremost that you know how much you’ve accumulated and who you owe.” Wolgamott said, “Knowledge is power, so write down who you owe money to, how much money you owe, then you can really start to formulate a plan to tackle that. Some experts say to start from the least balance that you owe and work your way up. Others say to start with the highest interest rate first, but the most important thing is to have a plan for how you’re going to tackle that. If you’re still struggling, contact those financial institutions and let them know that you’re still struggling as well.”
With swift pendulum swings of people seeking out new jobs, shortages on store shelves and COVID-19 continue to impact many industries, Wolgamott said to prepare for those changes to have a solid saving base.
Wolgamott said, “As uncertainty continues, it’s really important, first of all, the budget first and foremost. Knowledge is power. So knowing what your budget looks like and if you can continue to save, you can’t save too much money right now.”
A survey by Lincoln Financial Group late last year suggests some of the changes to personal finance brought on by the pandemic could be lasting.
Their recent Consumer Sentiment Tracker shows nearly 60 percent of the Americans surveyed are making or plan to make permanent changes to the way they spend. More focus is on long-term financial goals like saving for emergencies, retirement and inflation.
For December 2021, the US Bureau of Labor Statistics said consumer prices were up 7 percent from 12 months ago.
Wolgamott said with those increases to items people routinely purchase, in your budget to add in that increase to prepare.
Wolgamott said, “We haven’t seen anything that suggests that’s going to go down in the near future, so it’s really important that when you plan that budget, you’re giving yourself a little bit extra room to take care of some of those expenses.”
At the same time, household spending is expected to maintain the growth it saw in 2021.
The Federal Reserve Bank of New York’s Household Survey shows a 4.6 percent expected increase in the next 12 months. Food and transportations with the highest growth.
Wolgamott said it’s a good idea to have emergency savings to cover up to three months worth of expenses.
“If you want to do some extra spending, make sure that you’ve got plenty of money in your emergency account and that you’re not spending that down too much.” He said, “Have at least three months of expenses in that emergency account if you can, and then if you’re over that point, you can spend a little bit of money. You want to pay attention to what you’ve got in there and make sure that you continue to fund that emergency account probably for the next six months to a year.”
He added if you are having challenges reaching out to your financial institution.
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