Krista McDougall, CPA at Richards & McDougall, PC has tips on budgeting

MANISTEE — With inflation skyrocketing and interest rates rising, it seems like the average American is having a hard time getting by — let alone saving for an emergency — or for the future.

However, help is available in the form of someone whose day job involves budgeting and money management – ​​Krista McDougall, Chartered Accountant at Richards & McDougall, PC based in Manistee.

The News Advocate reached out to McDougall for daily advice people can use to better manage their finances and budget.

MANIST NEWS ADVOCACY: What are some of the basic things people can do better to budget/plan for emergencies?


KRISTA MCDOUGALL: One of the important key factors in creating a budget is knowing what you’re currently spending your money on. This will help you identify where your money is going and which domains can be reduced or removed altogether.

It is important to try to have a minimum of one month of living expenses in your emergency savings account, with the ideal amount being at least six months of saved living expenses.

MNA: What are the best ways to save money? How can this be done, especially with rising prices?

MCDOUGALL: There are different methods a household can use to save money, even with rising prices.

One important thing to keep in mind when trying to save money is missing out on employer matching contributions to retirement plans. Even if you can’t invest much in the pension plan, try to put at least the minimum amount needed to maximize employer matching contributions.

Households should look for ways to reduce monthly payments, for example by revising the interest rates they pay on their debts. By researching mortgage rates, they may be able to lock in a lower rate for 15-30 years, which may result in a lower monthly mortgage payment and may result in paying less interest on their home and possibly paying it back earlier.

It is very important to reduce interest rates on debts such as credit cards and personal loans. If you have a 0% balance transfer offer on a credit card and the fees are reasonable to use this offer, it may be beneficial to transfer higher interest credit card debt to save on interest and repay the balance. Even if you have a card with a higher balance but a lower interest rate and a second card with a lower balance but a higher interest rate, pay off the one with the higher interest rate first. raised.

The grocery store is a place where everyone has seen the prices go up. Meal planning is a way to help cut costs by checking the sale ad or using money saving apps to see what’s on sale for a week and planning a menu around that . If you can buy the generic brand or buy items in bulk, you can also save money. Bundling trips in the vehicle can help increase gas prices with carpooling where possible.

MNA: What are the best ways an average person or family can fight inflation, especially if their take home income/salary does not increase with the level of inflation?

MCDOUGALL: To help fight inflation when your normal income isn’t increasing in increments to match the cost of living, you should review your budget to see where you’re spending money and where you can cut costs. H

Having multiple monthly subscriptions can be reviewed to see if they are all needed or if they can be bundled into one or two.

If you typically eat out several times a week, cutting back on those outings and working on meal planning and cooking at home will save you monthly costs. Simple things like making coffee at home and making lunch instead of eating out can save a lot of money.

MNA: What are the most common mistakes people tend to make when budgeting?

MCDOUGALL: One of the most common mistakes people make when budgeting is not allocating funds for savings or retirement. It’s important to put money aside from every paycheck, regardless of the amount, to help build an emergency fund and/or a retirement fund. You should also seek the help of a financial adviser.

MNA: What general advice would you give people to better budget/plan for the future, regardless of inflation or unforeseen issues?

MCDOUGALL: Once you have a budget in place, make sure you follow it and don’t allow yourself to continually go over and under budget. It’s important to continually review your budget as things change to make sure your goals are realistic for your budget and your savings. Try not to deplete your emergency fund unless absolutely necessary.

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