For the first time ever, the average price for gas has surpassed $4 in every U.S. state, with California topping $6 a gallon. JPMorgan analysts say California's prices could spread nationwide by the end of the summer, putting even more strain on consumers' wallets. Lynnette Khalfani-Cox, financial expert & The Money Coach, joined Cheddar to offer on how to budget during this inflationary period.

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How To Adjust Your Budget As Prices of Gas & Food Rise

here to discuss how to budget for these rising costs are Lynette County Lynette, you already know Lynette California cox financial expert and the money coach Lynnette, thank you so much for joining us. We've got to start off real quick because we've got a lot to get to, how can people adjust their budgets for the gas prices and inflation because it's crazy out here, right? Everybody is feeling the pain at the pump and there's no question that we're spending a lot more dollars in terms of just trying to get around. One of the things that I'm talking to people about is really reconsidering their modes of transportation and whether or not they need to always be so tied to their vehicles, case in point in my family, we actually sold our second car um just two months ago and it was a huge savings. Um, and I did the math to see, you know, because americans are really keen on having so many vehicles, But on average you can save about $10,000 a year Just by getting rid of that second car that I know everybody thinks that they need, but your family might not need. So you're going to save on gas insurance, maintenance and of course those car payments which are averaging, you know, for uh used vehicles anywhere from about $480 to $490 a month. So as much as $680 a month for new car payments according to data from experience. So reconsider first and foremost, do you have to have that extra car, which might just be sitting in your driveway, not to mention Shannon used car prices are through the roof right now. So you probably get some money back as we did Um, when we sold our vehicles. So that's just one kind of strategy and one uh, thought process that people should take into consideration on the, on the car in front. Well, that's a great way to save money, but you know what, not everyone drives and I'm sure my wife doesn't want to give me a ride to work every day. So what about those other people out there who don't drive or that's not an option for them. How can they adjust their budget to account for inflation? Right. So a couple of other things on the transportation front. Certainly if you have good public transit in your area, if you have a car pooling opportunity sometimes, honestly, if you look at the math, if you're say commuting from New Jersey into New york every day, you're paying a ton to go through the tunnels, etcetera. And in some cases, ridesharing options may be just as affordable. Fairy Transportations. You can also ask your employer about subsidizing or underwriting the cost of your commute for those of you have to go back to the office and who don't have hybrid or or remarks or remote work opportunities. But the long story is the long story short is you really have to get creative and think about ways that you can alternate always having to go fill up that gas tank every single month. And then of course there's other tools like gasbuddy um, and other apps that I'll show you the cheapest gas in your area based on, you know, where you work or where you live, that kind of thing. But all of these strategies can kind of help you to pay a little bit more at the pump or using alternative means of transportation to get around these high gas prices. Okay, well besides gas price, you know, it's difficult to practice to reduce spending on essentials like food or energy. So should people instead focus on cutting back on other spending categories besides just the gas and food and stuff. Sure, I do think that right now when everybody is worried about the potential risk of a recession, when we're seeing inflation raging, you know, 8.3, or so we absolutely need to make some amendments to the budget. And so again, one of the other things that I'm talking to folks about is using substitution. And so substitution basically means I'm not asking you to deprive yourself or to not be able to buy the things that you, you know want or need. But maybe you can go to say a generic brand when you're in the grocery store and you're shopping and you're, you know, grabbing that bottle of milk or that um, cereal box or that can of soup, does it have to be the brand name manufacturers. You know what a lot of times you get the store brand as a substitution and it's 15-30% cheaper. So that will save you a lot of money. You should also shop according to unit price. So start paying attention to labels and to the cost per unit. So you might be, you know, grabbing your typical um brand of uh, you know, toothpaste or toilet paper, etcetera. But how many roles are you getting on that toilet paper or how many ounces is that tube of toothpaste etcetera? So look at the unit cost the same is true for your meats and produce and things of that nature that you might be buying shop according to unit price. Pay attention to that. And that'll save you some money as well when you're in the grocery store, the supermarket, as long as you don't take me down to one ply toilet paper, we'll be all right. But you know, a lot of people, they have these kids and the kids, they don't want the off brand cereal. So here's a quick hack by the expensive box and then keep refilling that box with the off brand cheap stuff. The kids will never know the difference. Just don't even know the difference. Exactly. All right. But you know what your parents obviously exactly exactly. You gotta save. But you know what a lot of people might be saying to themselves, you know what I'll just call, you know, cut my losses, forget about it. I'm not gonna even worry about it. I'm just gonna wait until this inflation period dies down. Is that a mistake to just ignore it? Well, it is a mistake because the reality is we're all living in this era of you know rising prices and for so many things you can't just kind of get around it. There are some things that we need now. You should absolutely take a look at your budget and segregate like what is a true want something that's a nice to have but not a need to have. But even if you are going towards those areas where you're like, I'm just gonna be honest, I wanted, you know, I work hard for my money and you know, I want to be able to have some things that make me feel good. Well what I'm saying to those folks is again, I don't believe in financial deprivation. I do believe that all of us worked really hard for a living. Um but you can be smart about it, you can do things in moderation like you know summer is coming up and you might be thinking about a trip And because a lot of us have been on lockdown the last two years, there's this phenomena of so called revenge spending where people are like busting out and saying, I want to go to restaurants, I want to go take that trip. I didn't get to do so many things. Okay fine. Maybe you don't like have a, you know 10 day vacation in Europe. Maybe you go to florida or maybe instead of you having airline tickets, you take the family and drive and then you don't have to have a rental car and you don't, you avoid the plane tickets as well. So think about sort of scaling down in some areas, but still getting to do the things that you want to do. Yeah, you can stay cation, go to the local zoo or park and places you've never been right in your own community. I love those ideas. Thank you so much. Lynette California cox financial expert and the money coach.