As if this time of year weren’t hard enough on the budget, there’s a potential “dairy cliff” looming which could end up costing consumers on ordinary purchases like a gallon of milk. While consumers would have minimal control over such price increases, there are ways to mitigate the damage on their monthly budgets. Here’s what you need to know about the “dairy cliff” and how to keep your bills (and debt payoff plan) in check if prices go up.
What’s a Dairy Cliff?
Much like the fiscal cliff we faced all too recently, the dairy cliff is what would happen if Congress doesn’t come to an agreement. This time, they’re negotiating farm bills presented by the House and Senate agriculture committees. According to an article in NPR, we’ll revert back to the 1949 farm bill if an agreement isn’t reached by Wednesday.
What would that mean for the consumer? The price of dairy could double and stock would be limited. Back in 1949, the government gave more financial support to the dairy industry. In today’s market that would mean the government would actually have to buy dairy products at prices above market value, causing shortages for the rest of consumers and much higher prices on dairy products at the grocery store.
And that would be just the start. A domino effect across the rest of the farming industry could take place if a new farm bill isn’t agreed upon. While there’s hope that this threat could provide more motivation for the government to reach an agreement, the fact is that there’s a seemingly new “cliff” around the corner at every turn. That’s why it’s important to employ means to protect your budget now, no matter what happens.
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How to Balance Your Budget Amidst Price Increases on Everyday Items
History proves time and time again that changes in the economy can have disastrous effects on everyone’s personal finances. The best way to prevent financial disaster is to be prepared for anything that could happen. Budget adaptability will turn into financial success no matter what craziness happens in the economy.
What’s the best news? You can find ways to make your budget more adaptable even if you’re living paycheck to paycheck! Here’s how:
Maintain a Monthly Food Budget
For some, unplanned purchases at the grocery can be more damaging to the monthly food budget than price increases. The best way to not get lured into unplanned purchases through tempting displays or sale prices is to keep a monthly food budget which not only says how much you will spend at the store, but includes an itemized list of what you will spend the money on.
If you get to the store and see a sale you can’t refuse, then visit your list and…
“Borrow” from Other Areas of Your Budget
Borrowing from other areas of your budget could mean taking away (or decreasing the amount of) something on your budget to have more room for something else on your budget or something you would want to add to your budget. At the grocery store, this could mean foregoing one item on your list to make room in your budget for an unplanned item that you suddenly want or suddenly went on sale. For your budget as a whole, it could mean decreasing another cost (such as cutting cable or finding a cheaper phone plan) so you can allocate more money to your food budget).
Borrowing from your budget is just one way to make room for food price increases. While the cost of some food goes up, others could remain the same or go down, so you’ll want to also…
Utilize Price Comparison Tools
Not too long ago, trying to utilize price comparisons to save money could equal hours of labor in searching for coupons and reading daily circulars. It could also cause you to spend money on gas driving to multiple stores (some nowhere near each other or your home) to buy groceries. Thanks to the internet, you can now compare prices without wasting time on circulars or money on gas.
If you have an iPhone, use apps like PriceSpotting or CartCrunch. If you don’t have an iPhone, visit the web for price comparison tools like ZipList or MyGroceryDeals. A little bit of time online could save you enough to buy all the grocery items on your list and maybe even have some money left over!
If borrowing from your budget and utilizing price comparison tools isn’t enough to mitigate the damage of food price increases, then you can still save money and eat well by shopping your pantry:
Balance Price Increases with Pantry Meals
When money is tight, creativity can be your best friend. Even if you’re having trouble staying stocked up on daily staples, you may just have enough ingredients in your pantry to put together some meals without shopping. Even better, you could learn a few recipes that you’ll really love and even turn the creative cooking into a family activity.
Need some help with recipes to get started? GoodLife Eats and theKitchn have enough recipes to last for months. Check ‘em out and you could save money, find new favorite foods, and have fun in the process.
Dairy cliff or no, the economy’s fluctuations don’t have to ruin your budget. Try some of these tips out to save money in good times and bad.
Image Credit: Eduardo Amorim