September is here, which means it’s time again to start thinking about end-of-the-year expenses, savings and to-dos. But this year, things are a little different. Due to high levels of inflation, market turbulence and global issues, your year-end checklist might require some additional prep and planning.
2022 Fall and Winter Travel Prep
Higher costs of fuel, personnel shortages and overall inflation rates have led to more expensive flights, hotel stays and dining out.
Domestic airfare prices soared this summer and peaked in May. Fortunately, fall and winter prices are expected to drop up to 40 percent, which is good news for fall and holiday travel.
That being said, travel prices are still about 17 percent higher than they were in 2019, so make sure to leave some room in your budget if you haven’t traveled in awhile. Costs will likely be higher than they were a few years ago.
If you want to get the best rate possible on travel expenses, you can try apps like Hopper and Google Flights that will help you watch current rates and determine when to buy. Just make sure you read the fine print before booking; some third party sites don’t allow you to change or cancel your plans once you’ve booked.
2022 Holiday Spending and Inflation
The federal reserve has been increasing interest rates throughout the year in hopes of curbing inflation, and it looks like it might be working. The inflation rate peaked at 9.1 percent in June before falling slightly to 8.5 percent in July. However, that doesn’t mean things will improve drastically by the end of the year. Higher prices might affect your holiday spending, but there may be opportunities for savings.
Take a look at your year so far to determine how you’ll handle holiday spending. Are you on track, or has inflation eaten into some of your savings? If you feel you’ve spent more than you wanted to this year, you might need to plan a little earlier to look for deals or wait for items to go on sale.
You could also change how you give gifts during the holidays. Maybe this year, your family decides to pull names for gift giving instead of buying for everyone. Other alternatives include secret Santa, going in on gifts together, or donating to a charity in the name of your gift recipient. (Bonus: Gifts to charity are tax deductible.)
Regardless of how things play out through the end of the year, it’s smart to go into the holidays with a plan in place to avoid overspending.
A looming recession?
There’s a lot of talk of an impending recession. As we move into the end of the year, you might want to think about beefing up your emergency savings and being smart about your spending. The year-end spending can get out of hand for many families, but with all the uncertainty this year, it is even more important to create a budget and stick to it.
You also might want to perform a budget audit, and see where your spending may have crept up over the year.
Here are some additional resources for helping you manage your budget and prepare for downtimes:
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and fee-only financial planning. For more information on the services offered, contact Katie today.