- Inflation is making living costs more expensive this year.
- You might also face your share of financial upheaval due to COVID-19.
Be sure to work all of these into your budget.
As a general rule, it's a good idea to revisit your budget at the start of each year to make sure it's accurate. And it's especially important you do so this year.
We're starting off 2022 with the highest inflation levels in decades. As such, a lot of people are feeling the strain -- particularly those without money in savings. In fact, it's a good idea to account for these expenses when reviewing your finances -- and find a way to cover them as needed. Here are three expenses you can’t afford to ignore in 2022:
1. Higher food costs
Putting food on the table is something you have to do. But with grocery prices soaring, that can be a difficult thing.
The good news is there are steps you can take to shop strategically and keep your supermarket bills to a minimum. Planning out your meals in advance, for instance, could help you buy fewer items and waste fewer perishables. Some products may be worth buying in bulk for the added savings.
But still, you should expect your grocery bills to be higher than usual for a while. You may need to cut back on other spending categories in your budget to fit them in.
2. Higher gas costs
Grocery prices aren't the only thing that's up this year. We're also starting off 2022 with higher gas prices.
Now if you're still working remotely due to the pandemic, you may not be spending all that much money at the pump these days. But if you have an in-person job, higher gas costs could be straining your budget.
Since you can't help but fill up your car, it pays to look at getting a credit card that offers extra cash back on gas. That can at least help offset the higher prices you're forced to pay.
3. Time off from work due to quarantine
While the COVID-19 surge seems to be tapering off in some parts of the country, the virus is still spreading. You can't discount the possibility of having to take time off of work due to exposure or illness.
Even if you don't contract the virus yourself, if you have children who do, or who get exposed, they may end up needing to isolate and attend school remotely for a week or more. That could leave you in a position where you're out of work and aren't getting paid for it.
It's important to review your employer's time off policy with regard to COVID-related quarantines. In some cases, you may be eligible for some amount of pay, whether because your employer is generous or because you qualify for sick leave.
If you're self-employed, though, you could end up forgoing many days of income, and that's something you'll need to prepare for. If you don't have a loaded emergency fund, you may want to cut back on other expenses in your budget in case you're forced to take time off without pay.
Many people are starting off 2022 in a stronger place financially than at the start of 2021. But regardless of where you stand, it's important to keep these expenses in mind and take steps to tackle them accordingly so they don't cause you any personal economic setbacks.
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