BUDGETING FOR RAPID INFLATION IN 2022

By Corrie Forcet, Realtor® | The Forcet Group | KW Suburban Tampa

Corrie Forcet with The Forcet Group, here. I'm not sure if you have noticed, but the cost of living in Tampa has gone up a smidge. If you have observed that your Publix receipt has a few extra digets in the total, you are not alone. And as a Realtor, I try and remind my clients that the financial aspect of home buying doesn't end with the purchase. Home ownership comes with its own ongoing fees and future expenses you'll need to prepare for. The best way to do so is to establish a balanced household budget. Here are some tips for how to get started:

Set Your Goals

Once you have a clear idea of what's important to you, managing your household budget won't seem as daunting. The best place to begin is by identifying and setting some financial goals. These can be short-term goals like purchasing a new appliance or long-term goals like a large renovation project. Make a list of the most important goals for your household so you have a clear idea of how to manage your finances accordingly.

Identify Income & Expenses

Once you've established your financial goals, it's time to consider the actual numbers. The key to budgeting is to know how much money you have coming in and where it's going. Tracking income is typically as simple as consulting pay stubs or deposit statements. You can also include other income like tax benefits and commissions.

Then, identify what you spend your money on. Try making a list with various categories to separate annual, monthly and everyday expenses. In addition to things like groceries, utility bills and transportation costs, make sure to include things like credit card payments, entertainment subscriptions and savings.

Once you have both numbers as a starting point, try tracking your spending for a few months. You can do this in a variety of ways including collecting receipts or using online budget apps. The more you know about your financial situation, the more control you'll have.

Prepare for the Future

In building a household budget, it's crucial to include seasonal as well as inevitable home maintenance expenses. Even if there are parts of the year where you spend more in any category, plan for these expenses in your regular budget. Examples of seasonal expenses include gifts, summer childcare, travel and weather-related utilities. As far as home maintence expenses go, be sure you know the age and life expectancy of the large appliances and operational systems in your home such as the hot water pump, central air units, even your roof. Once you have an estimation of when these systems need to be, find out their cost and then budget monthly for those expenses in a sinking fund.

While these are only a few basic tips for household budgeting, they should get you started. The more practice you have tracking and managing your expenses, the easier it will become.