Latest / Talking FACS / Stretching Your Dollar: What to do When the "Ends" Don't Meet

Transcript

Stretching Your Dollar: What to do When the "Ends" Don't Meet · Talking FACS

• 0:01
  Welcome to Talking FACS, what you need to know about family,
• 0:04
  food, finance, and fitness.
• 0:08
  This nationally recognized, award-winning podcast is hosted by the University
• 0:12
  of Kentucky Family and Consumer Sciences Extension Program.
• 0:15
  Our educators share research knowledge with individuals, families,
• 0:20
  and communities to improve quality of life.
• 0:24
  Hello and welcome to MoneyWi$e on Talking FACS. We share information you can
• 0:29
  use to strengthen your family, your community, and our state.
• 0:33
  According to the Pew Research Center, when I was born more than half a century
• 0:37
  ago, just over 60% of Americans were living in what was called the middle class.
• 0:45
  And only a little more than 10% were classified as upper income.
• 0:50
  In 2023, the upper income category grew to almost 20%, and the middle income
• 0:57
  category had shrunk to just over 50%.
• 1:01
  On the surface, this might seem to be a good thing, but if you look at real income,
• 1:08
  you discover that income in the middle and lower levels has not kept pace with
• 1:14
  income in the upper level, which means that it is increasingly difficult to
• 1:20
  keep up with rising expenses.
• 1:23
  My guest today, Dr. Nichole Huff, Assistant Extension Professor for Family Finance
• 1:30
  and Resource Management, is here to talk about what to do when the ends don't meet.
• 1:37
  Welcome, Nichole. Hi, Mindy.
• 1:40
  This is a problem that we're seeing
• 1:42
  all over today. People just don't have enough money to make ends meet.
• 1:47
  What are some ways that we can deal with this challenge?
• 1:51
  Yeah, I think it is. It's becoming more of a challenge for everyone, right?
• 1:56
  And so, you know, regardless of your income bracket, just the rate of inflation
• 2:02
  and how slow our economy has been to rebound after the pandemic,
• 2:06
  but also for prices to come down on just everyday goods and services.
• 2:11
  And so it is just getting so much harder to stretch that dollar.
• 2:14
  And so making ends meet, you know, I think that that's a phrase that kind of
• 2:18
  it arose after the Great Depression days. And so how do you make your ends meet?
• 2:23
  How do you stretch paycheck to paycheck?
• 2:25
  And I think many Americans are feeling that today.
• 2:28
  And so there's generally two ways to balance a budget.
• 2:32
  And one is to make more money or spend less money.
• 2:36
  And neither one of those are very easy, but it really comes down to that.
• 2:40
  And so it is much easier, though, to reduce our expenses than it is to increase our income.
• 2:47
  You know, many of us are also strapped for time. And so the idea of any more
• 2:52
  hours in the day to make money can be a challenge.
• 2:55
  Although, you know, many Americans are getting creative with that,
• 2:58
  too, with side businesses and the gig economy.
• 3:01
  And so that's another conversation for another day. But what I think we can
• 3:05
  talk about in this episode is really what are some of those ways we can reduce our expenses?
• 3:10
  So great. Where should we start? What are some ways to reduce those expenses?
• 3:15
  Well, I think we can start by, you know, taking a look at what are our expenses.
• 3:21
  And so getting them all out in front of you.
• 3:24
  And this can be hard sometimes to track because we may have digital expenses and digital receipts.
• 3:30
  And so, you know, we're kind of as a society, we're past the day of just pulling
• 3:34
  out your checkbook register, right?
• 3:36
  And so we have to look at what bills are we paying online?
• 3:39
  When are they coming due? How am I spending my cash? What about all these one-click
• 3:43
  purchases and Apple Pays and recurring subscriptions?
• 3:48
  And, you know, it's taking a look at what is everything I'm spending my money on.
• 3:53
  And so taking a look at those small purchases.
• 3:56
  So, you know, the drive-through that I just went through or even a hobby.
• 4:02
  Like we sometimes don't think about our discretionary spending.
• 4:06
  And so if you're a gardener or a quilter, my mother-in-law is a quilter,
• 4:10
  and it adds up, you know, fabric and the cost of that hobby can get very expensive.
• 4:15
  So taking a look at your wants, but then also what are some of those larger expenses, those needs.
• 4:21
  So these are typically your housing, your medical, your insurance,
• 4:25
  those bills that aren't really discretionary.
• 4:28
  And so the first step is let's look at where our money goes.
• 4:32
  So you mentioned that it's easier to cut back on discretionary expenses because
• 4:38
  they are wants.
• 4:41
  But how are we going to cut back on those fixed expenses that are needs?
• 4:47
  Right. And so you mentioned fixed expenses. And so that's one thing when you're
• 4:51
  listing your expenses to take a look at.
• 4:54
  These idea of fixed and variable expenses.
• 4:57
  So fixed really refers to you know what you're going to be out each month.
• 5:05
  So your rent or your mortgage payment likely doesn't change each month.
• 5:08
  So, that is a bill that comes in that you know exactly what to budget for. It is fixed.
• 5:14
  You know when to expect it. You know exactly how much to expect.
• 5:17
  The variable expenses may fluctuate.
• 5:20
  So, you may still have a recurring payment, but it may change.
• 5:24
  And so, that could be revolving credit. So, if you carry a credit card balance,
• 5:28
  that could change from month to month.
• 5:31
  Your utilities, especially your electricity bill. So, you need electricity.
• 5:35
  You get a bill each month, but it can vary significantly on how much you use
• 5:40
  your heating and cooling.
• 5:42
  So it's an essential expense, but it is variable.
• 5:46
  You don't know how much to budget always. I mean, you can get an average.
• 5:50
  But ways to look, food is another big category. And so you have to eat.
• 5:55
  But often there is a lot of variability in how much we spend.
• 5:59
  And so, we can look at ways to save money, especially on those variable expenses.
• 6:05
  So, can we wear layers in our house and keep the thermostat set at a reasonable temperature?
• 6:12
  Can we open windows now that, I don't know, this is probably a false Kentucky
• 6:16
  spring, but when the temperatures are cool, can we open windows and let breezes
• 6:22
  come in instead of adjusting our thermostat?
• 6:25
  You know, when we're running our errands, can we batch those or carpool or just
• 6:29
  run errands on one day instead of getting out multiple times?
• 6:33
  Or, you know, make sure if we're already on our way home from work,
• 6:36
  use that time to stop by the grocery store.
• 6:39
  But taking a look at what are some ways to cut within those categories,
• 6:44
  because it doesn't seem like a lot, but small savings really do add up.
• 6:49
  So there's 52 weeks to a year. If you can cut one of your spending categories
• 6:53
  by $10, that's $520 for the year.
• 6:56
  If you can cut weekly spending by $20, that's over $1,000 spending for the year, and so on.
• 7:03
  So really, those little $10 here or saving $10 on a bill here or there, those really do add up.
• 7:11
  Well, and it makes you feel good. You know, maybe $10 a week doesn't make you feel really excited.
• 7:17
  But when you think about it in terms of $500, that's a whole different ballgame.
• 7:22
  And it's the psychology of saving that really makes a difference,
• 7:25
  right? Yep. Yeah, absolutely.
• 7:27
  So when expenses are tight and when money is in short supply,
• 7:33
  how can we find extra savings?
• 7:36
  Yeah. Again, making sure we're spending what we have wisely.
• 7:40
  And so when you are listing your expenses, I always suggest get a blank calendar.
• 7:46
  And if you don't have one, just make one, right? Like just draw it on a piece
• 7:51
  of paper and add like 30 squares, like 31 squares.
• 7:54
  But chart when your money is coming in and when it is going out.
• 7:59
  Because if you're having trouble making ends meet, maybe don't look at your whole year.
• 8:03
  Maybe don't look at half of your year. Maybe you'll just look at a month or
• 8:06
  paycheck to paycheck. And so you can look at, do I have enough of money coming
• 8:11
  in to cover what I need for until that next payday?
• 8:16
  And then are certain bills hitting at certain times that are inconvenient?
• 8:21
  And so most companies, they don't necessarily care when they get paid as long as they get paid, right?
• 8:28
  And so many, you can go online if you use an online bill management system and
• 8:33
  you can Log into your account and you can, yourself, without even talking to
• 8:37
  a customer service representative, change your due date.
• 8:40
  And so if paying a bill is easier for you at the first of the month or the middle
• 8:45
  of the month or the end of the month, you may have some flexibility.
• 8:49
  And so if you can't do it yourself, it's worth reaching out to a customer service
• 8:53
  department to see if there's any flexibility within that.
• 8:56
  Because if you can strategize to make sure that the bills that matter most are
• 9:02
  coming out when you have that money, that's an important strategy is to consider
• 9:07
  what's coming in, When's it coming in?
• 9:10
  And then what's going out? And if you have any discretion over that.
• 9:15
  And then always to, again, going back to unpleasant, making those necessary cuts.
• 9:20
  And so, you know, what can you cut out?
• 9:24
  Can you stop buying name brands?
• 9:26
  Can you not do streaming services or go without cable or cut a gym membership?
• 9:32
  Or, you know, what can you eliminate for the time being so that you can redirect
• 9:37
  that money to those essential needs?
• 9:40
  We talked earlier about our utilities because those are things that we kind
• 9:44
  of have to live with and they do fluctuate.
• 9:47
  What about taking advantage of the budgeting services that many of those utilities have?
• 9:53
  So, you know, if you can't count on your electricity bill being the same amount
• 9:59
  each month, some of those services will give you a budget bill.
• 10:04
  Yeah, always check into, again, many times there are creative ways to stretch
• 10:11
  our dollars and companies will offer programs to assist customers.
• 10:16
  And so always check into what are some of those options to make sure that you
• 10:20
  are maximizing all the tools that are available to you. Where can we look to
• 10:24
  find creative savings strategies?
• 10:27
  You know, when we started this conversation, we mentioned kind of that this
• 10:31
  idea of making ends meet.
• 10:33
  Came from the Great Depression. So let's look to past generations.
• 10:38
  So when you think to your grandmother, your great-grandmother,
• 10:41
  how did past generations save money?
• 10:44
  So they weren't a society driven by consumerism. So they lived within their means.
• 10:50
  They sold and traded those goods. They borrowed from friends and neighbors instead of buying new.
• 10:57
  They, you know, really began out of a place of need and necessity implementing
• 11:03
  those penny-pinching strategies.
• 11:06
  And so, you know, it is not throwing things away, looking at how you can reuse
• 11:10
  your resources, shopping your home before you go out.
• 11:14
  And so this means don't waste, especially food.
• 11:17
  Food waste is one of America's biggest expenses in terms of wasted money.
• 11:23
  And so shop your pantry, your freezer, your fridge, Make meals with what you have.
• 11:30
  Use, repurpose your leftovers. Because when we throw leftovers,
• 11:34
  for example, or food that's gone bad in the trash can, we are essentially trashing our cash, right?
• 11:41
  That is money spent going directly in the trash can.
• 11:44
  And so, you know, it's making banana bread out of ripe bananas, right?
• 11:50
  It's not wasting food and looking for ways to stretch those resources.
• 11:54
  You know, I love that saying, a penny saved is a penny earned,
• 11:59
  because again, it adds up over time.
• 12:02
  And so if we can't, many times, you know, we can cut expenses,
• 12:06
  but it doesn't make big dents in our budget.
• 12:11
  And that is frustrating. It's frustrating when you're looking at the big picture.
• 12:15
  So what you can do instead is make lots of small savings, because lots of, you know,
• 12:21
  And say that, I say to my kids all the time, waste not, want not.
• 12:25
  So we don't throw away something until we have emptied it out.
• 12:29
  You have an old shirt, turn it into a cleaning rag. You know,
• 12:32
  what are ways that you can get creative, use what you have, save what you have
• 12:38
  to make ends meet, right?
• 12:40
  It's about necessity is the mother of invention, right? Right.
• 12:45
  Nicole, thank you so much for your time. I think this is a show that people
• 12:49
  are going to come back to time and time again to re-listen to the tips and strategies
• 12:55
  that you have shared with us today.
• 12:57
  And of course, we always hope that they develop new habits and find ways to be money-wise.
• 13:04
  Thanks, Mindy. If you're just tuning in, you're listening to MoneyWi$e on Talking
• 13:09
  FACS, and you can find us wherever you listen to your favorite podcasts.
• 13:15
  Thank you for listening to Talking FACS. We deliver programs focusing on nutrition,
• 13:20
  health, resource management, family development, and civic engagement.
• 13:25
  If you enjoyed today's podcast, have a question or a show topic idea,
• 13:29
  leave a like and a comment on Facebook at UKFCSEXT or send us an email at UKFCSEXT@uky.edu
• 13:41
  visit us online at fcs.uky.edu to learn more about the University of Kentucky
• 13:48
  Family and Consumer Sciences Extension Program or contact your local extension
• 13:53
  agent for Family and Consumer Sciences.
• 13:55
  We build strong families. We build Kentucky. It starts with us.
• 14:00
  Music.