Power Up Wealth podcast – Inflation-Proof Spending Habits – Episode 29 transcript:
Sharla Jessop 0:00
Inflation is hitting everyone from all directions. I’m Sharla Jessop. Today, my guest, Parker Thompson, will share ideas to help inflation-proof your spending habits.
Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
Parker, thank you for joining me today.
Parker Thompson 0:47
It’s a pleasure to be here.
Sharla Jessop 0:48
Parker is part of our wealth management team at Smedley Financial. And he has a passion for educating people and helping them make good financial decisions. Parker, the recent inflation numbers came out and they’re not good. They’re higher than expected. And it continues to hammer everyone. What can you tell us to help relieve some of this pain?
Parker Thompson 1:07
Yeah, I think I wrote this, or wrote this article, you know, a couple months ago, and inflation was bad then. And it’s still that now. Arguably, worse for some people. The recent numbers that came in, and I just wrote it down just so I had them. But the most recent inflation was 8.2%. And the one that got everyone was core inflation. So that’s, you know, minus groceries and gas, the things that are volatile, that the core inflation was up 6.6 up from, you know, 6%. So that the tips that I shared here, were relevant, then, but I feel like they’re more relevant now, as inflation continues to climb. But I think in general, a lot of my, a lot of the tips that I’ve given here are more about assessing what we need, and where we can kind of cut back as well as not really cutting away lifestyle. Making sure that we’re still able to live the life that we that we want to, right?
Sharla Jessop 2:03
That’s important because nobody wants, nobody wants to live, you know, on rice and beans, just that’s it. So for some of us, it takes us back to when we’re very first married, and we can barely even get by and we’re scrimping and saving. And I know that many of our listeners feel like they’re right there right now. But we can all relate to that. So tell us one of the first tips.
Parker Thompson 2:23
Because I sense that people probably don’t want to hear you know, you need to cut back spending, you need to cut your lifestyle, or it’s not the most, it’s not the best advice that you ever want to be given. I tell people first and foremost if they’re not tracking their spending, or looking at a budget on a regular basis that that’s the first thing to do is to be looking at where your money is going. I think the common misnomers is that budgeting well, obviously, it’s not a it’s not a word that we like to hear. It’s something that we usually roll our eyes at. And we don’t typically love to do and sit down and spend time on it. But I think it’s very important to know what our money is being spent on, where it’s going, especially where we can improve, right? Do things that we’re spending money on, do they matter? Are they actually improving our lives? Is it more of a need isn’t more of a want? Especially in times like this. Those questions start to matter.
Sharla Jessop 3:15
Yeah, they become more relevant when they’re in the dollars are stretching further than before. What about research? You said in your article, research, research research. What do you mean by that?
Parker Thompson 3:26
I mean, this is to the probably the dismay of my wife, that I’m always researching things before we buy them. But it’s anything but an impulse buy. And sometimes we need to get things now and then, but relatively anything you can research or get a baseline price, you can start to research things that are maybe cheaper or better deal or if there’s sales going on. This can be as necessary as gasoline, right gas at the pump. There are websites that you can search what gas station in your area is giving the cheapest gas. And then there’s some there’s some things as small as okay, would you rather buy a new piece of furniture for 1000s of dollars or could you look up a secondhand site or somewhere where online, it’s they’re selling the same thing that is 1000s of dollars cheaper? I think a lot of the times we just accept the price that’s given to us, right, and we just buy it out of either time or necessity. But if we take the time out of our day to just research or just an extra 5 or 10 minutes to research that purchase, usually we can save a lot of money.
Sharla Jessop 4:31
I love that. And do you know what I love about this advice too? Is it doesn’t matter if you’re just starting out in life. Or if you’re in retirement, you still have all of these same tips and all the same ideas that you can use that will make a difference in your lifestyle and what you have. And I don’t know about you, but I love when I find a bargain shop where I can go and I’m gonna get the same thing basically, but at a great discount. I feel like I’ve you know, won my mini lottery.
Parker Thompson 4:58
Yeah, it’s a really good feeling. And I feel like one of the things we tell, obviously our retirees is that we don’t change money personalities throughout our life, right? So when you go into retirement, it’s not like you’re going to start to spend 1000s of dollars and things you wouldn’t have before for the first 40 years or, you know, married or, or, or life that you’ve lived up to this point. I think the same as if we develop these habits now they translate into retirement really well, like you said, they’re timeless tips that almost everyone at every age can use.
Sharla Jessop 5:26
And implement. You said join rewards memberships. Tell us about that.
Parker Thompson 5:32
And this is something where it’s kind of a nickel and a dime thing. You can join either rewards clubs, or your grocery reward clubs, or your gas stations have reward cards that they give out. Some paid and some unpaid. All these things can give you, you know, cents on the dollar off. In hindsight, that’s actually a lot if you kind of let it build up, right? At the pump, it’s like, oh, do I really want a 10 cents discount on my on every gallon of gas, right? Or do I really want two to 3% off of whatever groceries I’m buying? And yeah, during the course of that month or that year, it may seem like I don’t really want two to three cents per dollar discount, right? Why try or why give that much effort. But over the year or over years, if you add, if you continue to do this, you start to save hundreds, if not 1000s of dollars on things that you would normally buy. My caveat on that is things that you would normally buy. Because a lot of people, a lot of people will get discounts on things and they’ll say, oh, I can buy more, right? Because I have the discount. But if we’re truly buying what we already would, and we’re doing it smartly with either a membership or a card that is branded to whatever grocery store or gas station that we like to go to. So savings can add up for us.
Sharla Jessop 6:48
Yeah, I know a lot of families who have memberships, one for my family, for instance, and we use the same phone number. So everybody goes into the phone number and then everybody shares or uses the gas, you know, reduction cost or the you know, the reduced price gas. Those things do pay off. That is money in your pocket.
Parker Thompson 7:08
If you’re looking at the flip side of okay, I can spend more because I have a discount rather than you know, if you if you look at it that way, then you’re not going to put money in your pocket, right? But if you’re just doing the same purchases that you normally would, right, many of us have to get to get to get to work with gas, right. Many of us have to get their any ways. We have to buy gas anyways. You might as well discount it.
Sharla Jessop 7:29
No, I love I love gas at a discount for sure. The next one is one that I follow to the tee, almost with a caveat. Almost. Talk to us about grocery shopping lists.
Parker Thompson 7:42
Yes. And this is something that I learned from my mom actually, right? You go sit in the shopping cart with her and the grocery store was always the coolest thing when you were a kid. But you always see her list. And I love being the commander of the list, right? I tell her where to get things. But I learned from her that it wasn’t necessarily that she was just trying to keep track of things that she needed to get, although that’s one of the biggest purposes, right? But it was also to save money. Because when you get to the grocery store half the time and like, you know, my wife and I and our family I we try to follow to a tee, as well. But even we’re imperfect, right? We sometimes go when it’s dinnertime, and we’re hungry. And our eyes are a little bit bigger than our stomach. But a list helps us to stick to what we actually need. And it helps us to just essentially, if you want an analogy, to put blinders on like a horse during a horse race, right? Instead of looking at the uhhh and the awww to the left and the right or you know what the cinnamon rolls when you go into the grocery store and what smells good. You have a list and you’re just going for those things. So you ultimately spend less money. Because you’re not impulse buying whatever looks good or whatever sounds good in that moment.
Sharla Jessop 8:53
You’re not getting home with a lot of things that you don’t really need that sounded good at the time.
Parker Thompson 8:57
Right.
Sharla Jessop 8:58
Then you don’t really have a way to prepare them or, or something like that. I love that not just because I like staying on a list, but I really don’t like grocery shopping. And I like being able to just go up and down the aisles that I need to get something on and not every aisle.
Parker Thompson 9:12
Yeah, you could you could consider a life hack. Yeah, cuz I don’t like spending that much time in the grocery store. Nor do I like spending that much money. Yeah. Both sides helps out.
Sharla Jessop 9:21
That’s true. You know, we all have bills that we have to pay. What can you tell us about our bills?
Parker Thompson 9:27
Oh, this is something that I’ve just learned over the years, probably because I’ve just up until this point, have been kind of a poor college student, really trying to get by with what I have and the little income that we’ve had. And I think it’s just because while we’ve wanted to have these things or we’ve wanted to be able to pay bills or you know, whether it’s a cell phone bill, things that are kind of a necessity nowadays, but just not having the income to pay them every month. Sometimes it was calling the company out of necessity saying hey, we just we can’t make the payment what can you do for us? Or hey, I would like to continue this service. And we can’t make it happen right now. But a lot of times I’ve felt them, I’ve seen them come back, to my surprise, I’ve seen the companies come back and say, actually, we can get this to you at a discounted rate, or we can lower your bill. And I’ve been pleasantly surprised. And I’ve actually taken that to the next level, where if I just call customer service on these bills that I think are maybe climbing too high, most of the time, they will usually, you know, give us a discount, or they’ll they’ll say, hey, we can lower your bill. And I found that very actually effective. The fixed expenses that happen every month are usually what takes out most of our budget, right? So we can get those to go to come down. That’s more money in our pocket every month.
Sharla Jessop 10:42
And a lot of people don’t think about that. But you know, we’re all paying cable bills, or different things like that, and they just seem to inch up every month.
Parker Thompson 10:50
Yeah, I mean, it’s part of the it’s part of the game for these companies, right? That they get you on at a lower rate, and they start to bump it up, or just things become more expensive over time. But if you start to kind of compare what prices are around the market, right, so you have a cellphone service, there’s three or four or five, six other companies that do it. If you start to compare those prices, and you go back to your company, whether it’s for your cable bill or anything else, and you say, Hey, I would like to switch over to do this at this price. Usually, they’ll try to match that price, or they’ll try to get close to it. So it’s kind of a negotiation with your, with your companies that you do business with.
Sharla Jessop 11:23
I think that’s really, really smart advice. And a lot of us don’t think about it, we just write that check, you know, pay the bill, but we could be saving some money on that. Over time, that value really, really adds up. And not only that we live in a world of subscription services, where it’s so easy to sign up for something that we might only use seldom. And sometimes we even forget, we’ve signed up for this subscription until it comes time to renew it, we get an email.
Parker Thompson 11:51
Right? Yeah, and this is this is also a time to sit down and realize that you have subscriptions. Most people on a yearly basis will be like, what are we signed up for? We didn’t we don’t remember signing up for this, or we haven’t we forgot about this, it’s kind of gone on the back burner, then they have to cancel it. If you’re doing this more often. You’re not just letting that money go out the door every month without you even knowing it. So the subscriptions is a big part too.
Sharla Jessop 12:13
Make sense. You have another tip about buying not always new, but maybe secondhand.
Parker Thompson 12:20
Yeah, this is part of the kind of the research topic that I was discussing is just always looking out there for a cheaper or better price or something that fits your values more. A lot of the time, what we need is not the 10 to $15,000 sectional sofa, right? Brand new from the store. The majority of the time, there’s someone that’s selling it that’s only a year old, it’s gently used, and it fulfills our need just as much as the new one would have. And it gives it to us for the fraction of the price. I found that most of the things that we need, as long as it’s gently used and someone’s taken good care of it, we don’t necessarily need to buy it new. And we can get it for 1000s of dollars less, in some cases.
Sharla Jessop 12:59
Make sense. Big savings! Especially not only that, if you buy it gently used right now, you’ll probably get it. If you don’t pay if you bought it new, you might not even get it for six months at this point. So and this is a really big one. I think for a lot of a lot of people, maybe not so much people who were older who were raised during depression or were considered depression babies, because they learned early on to that you didn’t always have exactly what you want. But talk to us about delayed gratification.
Parker Thompson 13:28
Yeah, I like this one. And again, much to the chagrin of my wife, sometimes we’re in it as a team and maybe to the to the amusement of my friends. Sometimes we just don’t always buy what, what everyone has right now in this moment. Because we we really think do we need this? Is this something that we really just want? Or do we actually need it? Do we need it now? Or do we can we make do without it and purchase it later. But I think the biggest part of inflation and how it deals with things to do with our situation in the economy today is like you said some things are just on backorder supply and demand is all you know, mixed up. And a lot of things that were manageable to finance or to pay for now are exorbitantly high. They are just higher than they would be. It’s renovating a house or doing any sort of trade work is just high right now because the demand has been so high and they’ve just been so booked out that they can charge people higher than the supplies that they would normally get. And so when I say delay gratification is maybe you put off that renovation for another year or so. Maybe you put off that thing that you really like, the new car. Maybe you put that off that purchase off for another year or so and wait till prices have come down. Right if you can get by right now with what you have. That can save you 1000s of dollars as well.
Sharla Jessop 14:50
I agree. It makes sense. Where I know that we’re pushing our little car as long as it will go every day. Give it a little rub and say come on just a few more miles.
Parker Thompson 14:59
Yeah, yeah. One of the things it’s some of the inflation prices haven’t gone up, but like use cars, right and housing and wood and lumber. These are numbers that we’ve seen skyrocket, and those are those are not cheap things to do on your house anyways. They’ve just been more expensive. So if you can wait on some of those, it’s it’s a smart move.
Sharla Jessop 15:17
That’s true. Inflation truly has hit across the board everywhere, every profession, everything you’re doing. So these are great tips to help people get by in these crazy inflationary times. Parker, thank you so much.
Parker Thompson 15:30
Pleasure to be here.
Shane Thomas 15:36
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn.
The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Securities America. Inc., Member FlNRA/SIPC. Roger M. Smedley, Sharla J. Jessop, James R. Derrick, Shane P. Thomas, Mikal B. Aune, Jordan R. Hadfield, Lorayne B. Taylor, Registered Representatives. Investment Advisor Representatives of Smedley Financial Services, Inc.®. Advisory services offered through Smedley Financial Services, Inc.® Smedley Financial Services, Inc.®, and Securities America, Inc. are separate entities.
