Tips for How to Budget in a Constantly Shifting Economy

The last few years have been financially challenging for many American households. Despite solid wage growth being reported since 2020, inflation has made it hard for many people to balance their budgets month to month.

Some of the more common expenses that make budgeting tricky include things like rising food prices, as well as fluctuating prices at the pump. Beyond everyday essentials, the costs of bigger-ticket items like housing, healthcare, and even electronic devices like phones and laptops remain high, making it more difficult for many individuals and families to keep up.

According to a June 2024 report by the Bureau of Economic Analysis, the Personal Consumption Expenditures (PCE) price index increased by more than 19% between January 2021 and June 2024, with essentials like food and energy seeing some of the sharpest increases.

This kind of inflation affects nearly every financial decision for most American households, as what once felt affordable may now strain the budget. Even those with stable jobs and above-average income are rethinking how they spend and save.

In times like these, having a well thought-out financial plan matters more than ever. A well-adjusted budget can help you weather economic shifts, prepare for the unexpected, and stay aligned with your long-term financial goals.

This guide will walk through practical strategies for revisiting your budget in a changing economy. Whether your income has changed, expenses have climbed, or you’re simply trying to make better use of what you have, these tips will help you keep your finances on track, even in shifting economic conditions.

Start by Taking a Fresh Look at Your Budget

The first step in adapting to a changing economy is to revisit your budget, starting with your monthly income. Add up your take-home pay, along with any other consistent income sources like freelance work, tips, rental income, government benefits, investment earnings, or side gigs, so that you can get a clear picture of what you’re working with each month. If your income has recently changed because of factors like job loss, reduced hours, or a shift to freelance work, be sure to use your current monthly average.

Next, list your fixed expenses. These include things like rent or mortgage payments, utilities, insurance premiums, phone and internet bills, loan payments, and child care. Add them up to see how much of your income is already committed before you spend anything on more flexible expenses.

Compare your total income to your total fixed expenses. If your fixed expenses are more than your income, or if the gap between the two is smaller than you expected, it’s a sign that your budget needs adjusting. But even if you’re still comfortable, this is a good opportunity to check whether your current habits are helping you reach longer-term goals like saving, investing, or paying off debt.

Once you’ve got a clear view of your income and fixed costs, you can begin looking at flexible spending categories and deciding what changes to make. If you need a refresher on how to build or adjust a budget from the ground up, check out our beginner’s guide to budgeting.

Prioritize What Matters Most

When money feels tight, it helps to get clarity about what you truly need versus what you can do without. Essentials like housing, groceries, transportation, and health care should come first. Once those are covered, look at areas where you can make small but meaningful cuts.

Start by scanning your recent transactions. Are there subscriptions you don’t use, automatic charges you forgot about, or categories where spending creeps up without much return? Pausing or canceling even one or two things can help create space in your budget.

If you’re used to spending freely in certain areas like dining out, shopping, or entertainment, it may be time to set new limits. That doesn’t mean cutting all enjoyment out of your life. It means being intentional with where your money goes, so it continues to serve your priorities instead of working against them.

Some people find it helpful to rank spending categories in order of importance. Others try cash-only systems for non-essentials to stay on track. The right method is the one you’ll stick with, especially when it helps relieve some financial pressure in the short term.

Build or Protect Your Emergency Fund

An emergency fund can be a lifeline when the unexpected hits. Whether it’s a medical bill, car repair, or a gap in income, even a few hundred dollars set aside can prevent you from having to rely on credit cards or take on new debt when life doesn’t go as planned.

If you don’t have an emergency fund yet, start with a small, manageable goal. Try to set aside $25 or $50 a week if you can. Set up automatic transfers to a separate savings account to remove the temptation to spend it. If your budget is especially tight, consider saving any windfalls, such as a tax refund, cash gifts, or a work bonus, to jump-start your fund.

For those who already have some savings, your goal should be to preserve it as much as possible. You may not be able to contribute as consistently as before, and that’s okay. In periods of instability, holding steady can be just as valuable as growing your account.

Remember, an emergency fund isn’t just about money. It’s about feeling peace of mind, knowing you have something set aside that can make unexpected expenses feel less stressful when they happen.

Navigate Rising Costs with a Flexible Plan

When prices climb, the best thing you can do is stay flexible. That’s why budgeting isn’t a one-time exercise - it’s a tool you adjust as your costs and income change. And over the past several years, everyday essentials have been where some of the biggest changes have happened.

When looking for places to adjust your expenses, food expenses are a good place to start. When looking at your grocery bill, tactics like planning meals around sales, buying store brands, and reducing food waste can make a noticeable difference. Take stock of what you already have before shopping, and make a list to avoid impulse purchases. Some families use curbside pickup to avoid overspending in-store. Others build weekly menus based on what’s on sale, not just what sounds good. Likewise, you can save money by taking advantage of coupons or buying in bulk and freezing what you don’t need until later on in the month.

The same thing goes for reviewing your dining habits. Beyond paying for the good-tasting food at a restaurant, you’re also paying for that time savings and convenience. And if that extra expense is having a negative impact on your long-term financial goals, it might be worth cooking at home a bit more often.

If you do choose to dine out, consider making it more affordable by finding restaurants that have discounted specials. For carry-out, you can also save on the additional fees from delivery services like DoorDash or Uber Eats by picking it up yourself.

Gas prices are another area where small changes can help. Try combining errands to cut back on trips. Use apps to find the lowest prices nearby. If your schedule allows, carpooling even once or twice a week can reduce fuel costs.

For utilities, simple habits like unplugging unused electronics, using energy-efficient lightbulbs, and adjusting your thermostat can also trim monthly bills. These aren’t major changes, but over time they can add up.

Last but not least, it’s also worth looking at where you shop. Prices on recurring items can vary widely between stores. You might find that switching to a discount retailer, buying off-brand versions of products, or exploring warehouse club options helps stretch your budget further.

A flexible budget allows for change without losing control. Even if your income hasn’t increased, adapting your habits can give you more breathing room from month to month.

Lean on Trusted Resources

You don’t have to navigate a shifting economy alone. Member One offers tools and resources designed to help you manage your finances with more clarity and support.

If you’re looking for help organizing your budget, Member One’s financial calculators can guide you through planning loan payments, setting savings goals, and evaluating what you can afford before you borrow.

For more personalized support, you can also speak with a Member One team member about financial coaching, loan options, or savings strategies tailored to your situation. Whether you need to consolidate debt, prepare for a big purchase, or simply make sense of your numbers, we’re here to help.

If you prefer to talk in person, you can also find a local branch and meet with someone face to face.

Having a steady partner during uncertain times can make a difference. Even small questions are worth asking—especially when the answers can help you move forward with a plan that feels more stable.

The economy may keep shifting, but your financial approach doesn’t have to. With the right support and a budget that flexes with your needs, you can stay on track no matter what comes next.

This article is for educational purposes only. For personalized financial advice, it's best to speak with either a licensed tax advisor, financial advisor or an investment advisor. Contact our team today!