Krista McDougall, a CPA with Richards & McDougall, P.C. has

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

However, help is available in the form of a person whose day job involves budgeting and managing money — Krista McDougall, a certified public accountant with Richards & McDougall, P.C. based in Manistee. 

The News Advocate reached out to McDougall for everyday advice that people can use to better manage their finances and budgeting.

MANISTEE NEWS ADVOCATE: 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 to know what you are spending your money on currently. This will help identify where your money is going and what areas can be reduced or cut completely.

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

MNA: What are the best methods for people to save money? How can that be done, particularly with rising prices?

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

One important item to not overlook when trying to save money is to miss out on employer matching contributions to retirement plans. Even if you can’t put a lot into the retirement plan, try to at least put in the minimum amount needed to max out the employer matching contributions.  

Households need to look at ways to lower monthly payments such as reviewing interest rates that they pay on debts. By shopping around for mortgage rates, they may be able to lock in a lower rate for 15-30 years which can result in a lower monthly mortgage payment and can result in paying less interest on their home and possibly paying it off earlier.

Reducing interest rates on debts such as credit cards and personal loans is very important. If you have a 0% balance transfer offer on a credit card and the fees are reasonable to utilize this offer it may be cost savings to transfer higher interest credit card debt to save on interest and to get the balance paid down. 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 first.

The grocery store is a place where everyone has seen rising prices. Meal planning is a way to help reduce costs by looking at the sale ad or using money savings apps to see what is on sale for a week and planning a menu around that. If you can purchase the generic brand or purchase items in bulk you can also save money. Consolidating trips in the vehicle can help with raising gas prices along with carpooling if possible.

MNA: What are the best ways that the average person or family can combat inflation, particularly if their income/take home pay is not rising with the level of inflation?

MCDOUGALL: To help combat inflation when your normal income is not increasing in increments to match the cost of living would be to review your budget to see where you are spending money and where you can cut costs. H

aving multiple monthly memberships can be reviewed to see if they are all necessary or if they could be consolidated to one or two.

If you typically eat out multiple times a week, reducing that outing and work on meal planning and cooking at home will save monthly costs. Simple things such as making coffee at home and packing a lunch instead of eating out can save substantial money. 

MNA: What are the most common mistakes that 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 is important to put some money away each paycheck regardless of the amount to help build an emergency fund and/or retirement fund. You should also seek the assistance of a financial adviser. 

MNA: What is your general advice for people to better budget/plan for the future, regardless of inflation or unexpected issues?

MCDOUGALL: Once you put a budget in place, make sure to follow it and not allow yourself to continuously overspend and not follow the budget. It is important to continuously revisit your budget as things change to make sure your goals are realistic for your budget and savings. Try not to deplete your emergency fund unless completely necessary.

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