It turns out these costs, not tuition, are the major obstacle to earning a college degree, according to a 2021 study by the Center of Urban Future. Some students end up dropping out, while others turn to credit cards, thinking they’ll earn enough when they leave college to pay off the debt. The average amount students borrowed through credit cards was $1,309, according to a 2021 Sallie Mae report.

Those actions should only be a last resort though. A better path, experts say, is for students to create a budget before they even set foot on campus, then try to stick to it.

“Most people are already racking up tens of thousands of dollars in debt with student loans,” said Bruce McClary, spokesperson at the National Foundation for Credit Counseling, a nonprofit that helps people regain control of their finances. “The last thing you want is to add high-interest credit card debt on top of that.”

How do you build a budget?

First, consider all your expenses. They can include everything from books, housing, cell phones, food, transportation, and even clothing to attend a dance, a job fair or the gym.

Once you determine all the things you’ll need to pay for, you can begin allocating a dollar amount for each item and look for ways to stretch your money in each category. Begin with the necessities like books, computers, housing, food, and transportation.

For books, computers and phones, search for student discounts and consider buying used or refurbished items to save money.

Housing, food and transportation may require more research depending on where you’re living and what your goals are.

These are some costs we’ll help you tackle below.

On or off campus?

Off campus traditionally is less expensive, but soaring rents may have changed that. The typical asking rent in the U.S. reached $2,048 a month in May, a roughly 27% increase from $1,607 in March 2020, according to ZIllow.  Prices vary by city, but “you might have to have a lot of roommates now,” McClary said.

When comparing, don’t forget to include expenses for off-campus living like utilities and transportation that would be covered in campus housing.

There are also some social benefits you may want to factor into your decision.

“I think the first year, even if it’s not required, you should try to live in the dorm,” said JB Beckett, founder of financial services and management firm Beckett Financial Group. “It’s important to get university experience if it’s affordable. Make connections, do some networking so you can get a degree and build relationships and ultimately find a good job.”

Meal plan or no meal plan?

Campus meal plans cost an average of $563 a month, according to education data researcher Education Data Initiative, making the all-you-can-eat, three-times-a-day plan economical if you show up every time. Likely, you won’t because it requires waking up in time for breakfast, being on campus every weekend, and traveling to the dining hall.

Besides, meal plans are “more boring,” said Thomas Salvino, chief executive of Performance Wealth, a wealth management group. “You go to the same place every time.”

 Cooking all your meals will likely save money, but it’s hard to do.

“We experimented with money-saving alternatives to the meal plan,” McClary said, recalling his college days. “We planned meals, cooked as much as possible and froze meals because it saved money.”

But he said he fell off the wagon, attracted by the weekend breakfast buffet in the cafeteria where students could make omelets and waffles. “We signed up for just the weekend meal plan, but we didn’t get the most out of it because sometimes we were away. At best, we broke even. We could’ve done better if we stuck to cooking.”

If your school offers a more flexible plan, try it.

“Maybe take two meals a day for the first year and get your bearings to try to figure out what you’ll eat,” Barrett said. Or better yet, if you can pay for a certain number of meals, snacks and drinks on a punch-card basis whenever you want, take that one for more flexibility.

Car or no car?

You can probably survive without a car by walking, biking or riding public transportation. If you plan to take public transportation, make sure you budget for it.

“For full-time students (in New York City), a MetroCard will usually cost more than $1,000 each school year,” said Cassie Magesis, director of postsecondary access at the Urban Assembly, a nonprofit supporting public schools. “I can think of countless students who have dropped out of college because they can’t afford the price of a monthly MetroCard.”

If you need or want a car, it’ll cost you. You’ll have to pay for gas or electric charging, maintenance, parking, and insurance.

Auto insurance rates are up nearly 15% in some states over the past year, while nationwide premiums have risen more than $240 on average to $2,014 a year, according to comparison site Bankrate. Rates in the U.S. are expected to rise by an additional 8.4% in 2023, which would represent the largest increase in six years, according to consumer research and finance site ValuePenguin.

“If you can afford not to have a car, do it,” Beckett said.

What else?

Other things to keep in mind:

• A job can provide extra cash. “Stop by the career development centers,” Salvino said. “All schools have internships, and a lot are remote.” Or try to snag one of those coveted work-study jobs like teacher’s assistant so you can get paid while sitting in the class, and build better relations with the teacher. “All classes need TAs,” he said.
• A credit card, if paid in full and on time every month, can help you start building a solid credit history that will serve you well when you finish college, said Courtney Alev, consumer financial advocate at Credit Karma. A credit card also provides fraud and purchase protections that debit cards and cash don’t.
• If you’re still in high school, you might be able to take enough qualifying classes to skip a year or two of college, Beckett said. “That can save a ton of money, or you can spend that time and get a master’s degree,” he said.
• Your own bank account and an online budgeting tool like Mint can help you keep track of your budget and what money goes in and out.
• If you fall off the wagon and find yourself in a hole, get help immediately to protect your credit history. “A financial hangover isn’t easily cured by a couple of Tylenol, and it lingers a bit,” said McClary. Free credit counseling to help you create a budget or get out of debt is available from nonprofits National Foundation for Credit Counseling or American Consumer Credit Counseling.

The survey and analysis of household financial health and readiness by ACCC found that more than 80 percent of those polled use mobile apps for either banking, budgeting, financial planning, or credit tracking. Almost a quarter (24 percent) of those surveyed said all their financial management tasks and accounts are handled with mobile apps.

The demand for better and more comprehensive apps is growing as many Americans struggle to maintain a stable financial profile. Half of those surveyed have less than $1,000 in emergency savings, and 20 percent said they are behind on credit card payments. At the same time, nearly 80 percent of those polled for the Q2 Financial Health Index said they would be at least somewhat likely to use a mobile app that placed all their budgeting, household financial planning, credit monitoring, and debt payoff tolls in one place.

The ACCC Financial Health Index for the Second Quarter of 2023 surveyed 408 respondents across several household income categories. It was conducted during the month of June.

“Mobile smartphone banking has become fully integrated into the market for financial services. But American consumers want more comprehensive apps for household financial management,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “These findings coincide with identifiable market trends and with the nationwide launch of our industry-leading CreditU mobile app by ACCC.”

CreditU is a one-stop debt and financial management app that uses AI technology and human interaction to enable users to control their finances completely. The feature-packed app consolidates a user’s checking, savings, loan, and other accounts into a single mobile smartphone interface while delivering state-of-the-art tools for budget and expense tracking, credit monitoring, and net worth calculation.

Thousands of consumers have already enrolled at CreditU.org for the CreditU pre-order waiting list. The pre-order list is growing fast but is still open for new enrollees to sign up free for the official nationwide app launch this fall.

“Our team of expert financial counselors has been providing budget counseling, financial education, and debt management guidance for over 30 years,” said Katie Ross, Executive Vice President of American Consumer Credit Counseling, Inc. “The CreditU app is going to dramatically expand our capacity to help more people and put the most comprehensive tool for financial management right in the palm of people’s hands.”

The Q2 Financial Health Index also found that rising costs have forced more than 85 percent of respondents to cut back on daily spending. Entertainment spending has borne the brunt of these reductions, with about 45 percent of respondents reporting cutbacks in that category. But a significant number – about 40 percent – also said their food and transportation spending has been reduced.

Almost 40 percent of participants revealed they have recently fallen behind on a monthly payment: The most common: credit card payments, with 20 percent of respondents reporting they recently fell behind on a credit card payment. Reported delinquencies on car payments, personal loans and mortgages were much lower, the survey found.

About American Consumer Credit Counseling, Inc 

American Consumer Credit Counseling, Inc is a non-profit 501(c)(3) credit counseling organization that is dedicated to helping consumers achieve financial management through various debt solutions, such as credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education. With the goal of empowering consumers to reach debt relief, ACCC provides a wide range of free personal finance resources that cover topics such as budgeting, credit and debt management, student loan assistance, homeownership, identity theft, senior living, and retirement. By using ACCC’s tools, such as worksheets, videos, calculators, and blog articles, consumers can make informed decisions about their financial future. ACCC has an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). Visit ConsumerCredit.com to access free financial education resources and learn more about ACCC. Additionally, check out ACCC’s YouTube Channel @ConsumerCredit for excellent video content.

“People start getting ready for fall with their kids returning to school,” says Jeof Oyster, a travel adviser with Outward Travel in Greeley, Colorado, noting a strong reason some stay closer to home.

Still, planning your escape in advance is one of the most reliable ways to save money. Estimates on how far ahead range from a year to a month out, though most travel professionals stress that the time is now. “I’m still seeing decent availability for September, but accommodations will start filling up fast as we get closer to Labor Day,” Oyster says.

In addition to timing your reservations, consider other money-saving travel strategies. American Consumer Credit Counseling, a nonprofit organization devoted to consumer financial management, recommends driving trips as thrifty alternatives and inexpensive outdoor activities such as camping and hiking.

“Road trips are always a great way to pack a ton of value into a trip,” says Laura Motta, digital editorial director for the travel brand Lonely Planet. She also recommends state parks over national ones and lake destinations over ocean locales. “If you’re really looking to save, opt to stay in a log cabin or cottage away from the lakeshore.”

Additionally, look for destinations where traffic dies in the fall. In Alaska, the cruise season starts to wind down over Labor Day. “It’s a great time to get the most bang for your buck,” says Jen Rosa, a travel adviser with Cruise Planners.

To arouse your wanderlust, here are five destinations where you can celebrate summer’s last hurrah on a budget.

Comb a beach in Fort Bragg, California

Indigenous tribes populating the north coast of California frequently visited the area now known as Fort Bragg to collect shellfish, seaweed and salt. Today, 170 miles north of San Francisco, the former Mendocino County milling town — which is entirely enshrined as a California Historic Landmark — attracts beachcombers for another reason: beach glass. Though it’s hard to believe, before 1967, the ocean served as a city dump site. But the ocean has given back. Apothecary bottles, auto taillights and other glass debris have been polished by the surf action, resulting in a gem-studded beach of smoothed sea glass. Glass Beach — where visitors are encouraged to take photos, not glass — resides in MacKerricher State Park, also home to tide pools and hiking trails.

Where to stay: Overnight at the inexpensive Jug Handle Farm & Nature Center, a nonprofit educational center about 5 miles south of Fort Bragg where programs cover the Native American use of plants and mushroom identification.

Take a last-chance mountain drive at Mount Washington, New Hampshire

Before the snow flies in the White Mountains, take a seasonal joy ride up the Mount Washington Auto Road, a 7.6-mile “road to the sky” in Gorham gaining more than 4,000 feet in elevation to reach the 6,288-foot summit of Mount Washington. (The toll costs $45 over Labor Day weekend plus $20 for each additional passenger.) The attraction, opened in 1861, offers scenic turnouts and short hiking trails en route to the peak where motorists can visit the Extreme Mount Washington museum to learn about the peak’s polar-like weather, the 1853-vintage Tip Top House and the popular gift shop, dispensing bumper stickers that read, “This car climbed Mt. Washington.”

Where to stay: For convenience, consider The Glen House at the foot of Mount Washington.

Attend the state fair in Minneapolis

Salute the seasonal harvest over Labor Day by attending a state fair. Several states hold them over the holiday weekend, including Colorado, Michigan, Minnesota and Washington. Dating back to 1855, the Minnesota State Fair sprawls over 320 acres through Sept. 4 (advance tickets $15). Apart from games and rides, the fairgrounds are packed with 4-H livestock exhibits, beekeeping demonstrations, horse shows, displays of perfect tomatoes and pumpkins, juried art exhibits and contests for the best cakes, jams, quilts and stamp collections. Don’t miss the dairy-meets-art tradition of refrigerated busts sculpted from giant slabs of butter. Chow down on fair food spanning more than 500 menu items, 80 of them served on a stick including deep-fried candy bars, spaghetti and meatballs and Key lime pie.

Where to stay: Numerous affordable hotels, including the Hampton Inn & Suites Minneapolis University Area, are on the light-rail Green Line that connects, with a short bus transfer, to the fairgrounds.

Bake in the heat in Scottsdale, Arizona

Hot weather lovers meet bargain seekers in the summer in Scottsdale, the resort-filled Phoenix neighbor. Temperatures in the Sonoran Desert destination typically average in the low 100s throughout the summer and into September, when many resorts slash their rates and tout their swimming pools. (Even if you choose a hotel without a pool, you can get a day pass to one starting at $15.) Rise early to catch the coolest temperatures on the hiking trails of the vast McDowell Sonoran Preserve. Float down the Salt River through the Tonto National Forest on one of the final weekends of tubing. Spend your après-sun hours in Old Town Scottsdale, filled with galleries, shops, restaurants and museums — including Western Spirit: Scottsdale’s Museum of the West and the Scottsdale Museum of Contemporary Art.

Where to stay: The affordable Hyatt Place Scottsdale/Old Town puts the neighborhood’s attractions within walking distance.

Jump in a lake in Joseph, Oregon

In northeastern Oregon, the small town of Joseph is a gateway to glacier-carved Wallowa Lake, the surrounding Wallowa Mountains and Oregon’s largest wilderness area, Eagle Cap Wilderness with more than 500 miles of hiking trails. For water lovers, Wallowa Lake offers clear shallows and uncrowded beaches for swimming on its north and south ends. Paddle the lake from Wallowa Lake State Park in the south, which hosts a marina renting kayaks, paddleboards and canoes as well as dispensing fishing licenses for those seeking to cast for trout. Admire views of the lake from atop 8,238-foot Mount Howard reached via a Swiss-built tram. In Joseph, witness the inspiration the surrounding landscape has had on local artists in its many galleries.

Where to stay: Built in 1923 adjacent to Wallowa Lake State Park, the Wallowa Lake Lodge has all the rustic charm of a classic national park lodge — it’s constructed of trees cut and milled on the property — without the surge pricing.

In theory, it sounds pretty simple: You make a certain amount of income and set a certain amount of that aside in an account that you only tap into when the going gets especially tough and you need to shell out dough for something like a new car part or a surprise medical bill. But embarking on building a six-month (the recommended amount) emergency fund can be challenging.

Where do you begin? With the help of finance experts, we’ve laid out a multi-step plan of attack. 

Go In With the Right Mindset

“Saving is primarily a mental game that you can win,” said Adam Garcia, founder of The Stock Dork. “Setting away even a tiny amount of money on a regular basis can eventually lead you to your objective, no matter how low your starting point is. Time and a little self-control are all that is required.”

Get an Accountability Partner

“The journey to starting and faithfully contributing to an emergency fund is more successful when done with a partner,” said Lucia Jensen, CEO of WeLoans. “Consider working with your financial advisor to help you stay on track.”

Map Out Your Spending

“Take the time to distinguish what your necessary expenses are, and what your discretionary expenses are (i.e. streaming services, shopping for clothes),” said Katie Ross, EVP of American Consumer Credit Counseling (ACCC). “If you’re in a tight spot financially, you may want to cut out some discretionary spending. Your emergency fund should cover your essential needs. After you calculate your total expenses for one month, multiply that number by six. The final number is how much money you should have for your six-month emergency fund.”

Rethink Subscriptions and Sign Up for Promotions

“Whether it’s your cable company, cell phone provider, or gym membership, it’s time to rethink the value of your subscriptions to their services,” said Owen Wilcox, co-founder of USInstallmentLoans. “You have probably forgotten about other subscriptions, yet they continue charging monthly fees. Consider canceling, putting some on hold, or renegotiating the deals to free up critical funds to be redirected to your emergency fund.”

Start Setting a Percentage of Your Paycheck Aside

“Once you’ve determined your monthly expenses, it’s time to start putting aside money for your emergency fund,” Ross said. “If your budget allows, save 5 to 10% of your paycheck. To add even more money to your emergency fund, consider cutting out discretionary spending (such as on coffee or going out to eat) for a few months. If you receive any cash gifts, tax returns, or have leftover money from your budget you didn’t spend, redirect all that to your emergency fund.”

Set Small, Inspiring Goals

“Instead of one major savings goal, make multiple smaller ones,” Garcia said. “Prepare for success from the beginning. Plan for one month’s worth of spending rather than three months’ worth immediately. Or you could wait a month. Whatever you need to do to make your initial objective seem attainable.”

Once you accomplish your first goal, you should feel inspired to continue with a slightly bigger goal. 

“Make your second goal even more challenging, and your third goal even more challenging still,” Garcia said. “As time goes on, you’ll have developed a habit of saving, and the positive motivation you’re generating by achieving modest goals will help propel you toward bigger ones.”

Set a Long-Term Goal, Too

“Set a long-term savings goal for an amount that you want to meet,” said Dr. Kortney Ziegler, CEO and founder of WellMoney. “Then break that down into smaller daily saving amounts that you can maintain in order to achieve that bigger goal. For example, if you wanted to save $500 over the next six months, you’d set a daily goal of saving — at minimum — of approximately $0.34 cents a day.”

Automate the Process of Saving

“The simplest method to conserve money is to keep it out of your sight and mind,” Garcia said. “Direct deposit is offered by the majority of employers, and some even allow deposits to be made to more than one account. Your company or bank can automatically deposit the amount you choose into a separate account for your emergency fund.”

Store Funds in a Proper Savings Account

Before you start building your emergency fund, you need to find the right place to stash it. A proper emergency fund account offers two key characteristics: A generous interest rate and easy access to your money.

That’s why many experts suggest you open a high-yield savings account.

“High-yield savings accounts allow the client to earn interest rates at a higher level, currently some of the highest we’ve seen in many years,” said Morgan Gray, SVP, Head of Bask Bank and Consumer Segmentation. “And while you’re earning high rates, your money is still accessible to use. Alternate savings vehicles such as a 401(k), a CD account, or stock market investments might not offer the opportunity to withdraw money right away if you need it in a pinch. But with a high-yield savings account, you have full access to your money anytime and can withdraw without penalty.”

Don’t Increase Your Monthly Expenditures or Get a New Credit Card

“Don’t allow yourself to be lulled into a false feeling of security about your financial situation once you’ve established automated savings,” Garcia said. “In the example of giving up a new pair of shoes every month only to replace it a few months later, you’re not saving at all.”

Don’t Save Too Much — Invest the Rest!

“Your money is probably sitting in a low-yielding savings account, which means it’s earning virtually nothing,” Garcia said. “Once you’ve achieved your final aim, you should stop making contributions to that account. Your retirement funds are a good place to start because they’ll be able to bear the most fruit over time if you’re patient.”

Sticking to a vacation budget is always a challenge: even more so with elevated costs across the board due to inflation, supply chain issues, staffing shortages and other factors. American Consumer Credit Counseling, Inc (ACCC) is advising its clients and other consumers with strategies to keep their summer fun on budget.

“Summer travel always presents challenges for budgeting and personal finances, but with inflation soaring, and a post-pandemic surge in demand, people are really feeling the strain on their wallets,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “ACCC continues to be committed to helping Americans stay on top of their finances while not sacrificing the things that matter most to them. There is always a way to enjoy vacation without digging a financial hole.”

According to a recent NerdWallet study, 92 percent of Americans traveling this summer say they are planning to save money on major expenses like flights and hotels. At the same time, 26 percent say that they plan to accrue some credit card debt in order to cover travel costs.

Tips and Tricks for Summer Travel on a Budget:

1. Stay close to the ground – Driving has always been less expensive than flying, and that will not change anytime soon. Consider driving to your travel destination if it’s a feasible option. Or build your vacation around the road tripping – with stops or stay-overs at points of interest along the way.
2. Be a savvy airline consumer – The closer the travel event, the more expensive flights get. By purchasing tickets in advance, consumers can save significant money. Also, travel and hotel booking services such as Priceline, Hopper, and Expedia can help you zero in on the best deals at any given time when you are booking.
3. Explore the outdoors – Camping, hiking, and other outdoor activities are all great ways to limit expenses while enjoying a vacation that brings family together. Like anything else travel related, there are different price points for campgrounds, RV rentals, and other necessities that make an outdoor vacation accessible to all.
4. Create a separate travel savings account – Keeping your travel savings separate will help you stay organized while limiting the temptation to dip into savings meant for other major expenses to fund your vacation.
5. Stay flexible – Unplanned situations arise frequently, especially when you’re away from home, so try to book a hotel or Airbnb with a free cancellation policy or a flight with a ticket refund option.
6. Sign up for ACCC’S new CreditU app. The CreditU mobile app is a next-generation personal finance app that transforms financial management using both AI and human expertise. CreditU offers budget and expense tracking tools, credit score and debt-to-income tracking, financial education resources, debt management, and other tools at a user’s fingertips. Several of the features are ideal for any household that wants to vacation on a reasonable budget. Consumers can join the pre-order waiting list for the CreditU app right now at org.

About American Consumer Credit Counseling, Inc 

American Consumer Credit Counseling, Inc is a non-profit 501(c)(3) credit counseling organization that is dedicated to helping consumers achieve financial management through various debt solutions, such as credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education. With the goal of empowering consumers to reach debt relief, ACCC provides a wide range of free personal finance resources that cover topics such as budgeting, credit, and debt management, student loan assistance, homeownership, identity theft, senior living, and retirement. By using ACCC’s tools, such as worksheets, videos, calculators, and blog articles, consumers can make informed decisions about their financial future. ACCC has an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). Visit ConsumerCredit.com to access free financial education resources and learn more about ACCC. Additionally, check out ACCC’s YouTube Channel @ConsumerCredit for excellent video content.

Allen Amadin, the visionary President and CEO of American Consumer Credit Counseling, Inc declares, “The CreditU mobile app represents an epoch-making breakthrough in comprehensive debt management and personal finance tools, setting a precedent for the 21^st century. At ACCC, we are steadfast in our commitment to innovative financial management, enabling us to forge lifelong relationships with people around the nation, empowering them to attain enduring financial stability and success.”

The highly anticipated CreditU app will launch in late October for iPhone and other iOS devices, with availability on all Android devices to be announced the first of the year. American Consumer Credit Counseling, Inc invites individuals to secure their position on the pre-order waiting list exclusively at CreditU.org.

The CreditU app offers a wide range of features and functionalities that empower users to manage their finances effectively and gain a comprehensive understanding of their financial status, including bank and credit card account integration, a holistic financial overview that allows users to track their financial health and make informed decisions, expense tracking and budgeting, financial goal setting, personalized recommendations, and more.  CreditU empowers users to make informed decisions, achieve financial goals, and improve their financial well-being.

But the cost of buying on impulse or because of emotion instead of need can far outweigh the satisfaction of a purchase made in haste or on a whim. The average American spends nearly $1,500 per month on non-essentials, according to the business and marketing consultancy BusinessDIT. And the financial services provider LendingTree found that nearly 40% of Americans have admitted to overspending to impress others or appear successful.

Counselors at American Consumer Credit Counseling, Inc (ACCC) often advise clients on ways to control overspending as part of an overall strategy for better financial health.

“Better awareness of what you are buying and applying self-discipline are the best tools to avoid impulse spending and keep discretionary expenses in check,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “We coach our clients and others to make deliberate buying choices that align with your long-term goals.”

Here are five strategies that ACCC recommends to help control impulse purchasing:

1. Create and Stick to a Budget: The first step to gaining control over your spending habits is to establish a realistic budget. Start by assessing your income, expenses, and savings goals. Allocate a specific portion of your income for discretionary spending on non-essential items. By having a clear picture of your financial situation, you’ll be better equipped to make informed decisions and avoid impulsive purchases that may strain your budget. Remember to periodically review and adjust your budget as needed to accommodate changing circumstances.
2. Set Priorities and Define Needs vs. Wants: Understanding the difference between needs and wants is essential when it comes to controlling impulse spending. Before making any purchase, ask yourself if it aligns with your priorities and whether it is a true necessity. Differentiating between essential and non-essential items can help you resist impulsive urges and focus on what truly matters. Consider implementing a “waiting period” before making significant purchases. This practice allows time for reflection, helping you determine if the desire is genuine or merely a fleeting impulse.
3. Practice Mindful Spending: Mindfulness can be a powerful tool in curbing impulsive spending habits. Instead of mindlessly swiping your credit card, take a moment to evaluate your motives and the potential long-term impact of your purchase. Ask yourself if the item will bring lasting value or if the joy it provides will be short-lived. By cultivating a mindful approach to spending, you can reduce the temptation to splurge on items that won’t contribute to your overall well-being and financial stability.
4. Avoid Triggers and Temptations: Recognizing your personal spending triggers is crucial in combating impulse purchases. Whether it’s visiting your favorite shopping website, entering a mall, or even seeing advertisements, identify the situations that tend to weaken your self-control. Limit exposure to these triggers by unsubscribing from marketing emails, avoiding window-shopping, or finding alternative activities that don’t revolve around consumerism. Additionally, consider implementing a “cooling-off” period for online purchases, adding items to your cart but delaying the checkout process. Often, this pause is enough to break the spell of impulsive buying.
5. Track and Review Your Expenses Regularly: Monitoring your spending habits is an effective way to stay on track and ensure your discretionary expenses remain within your budget. Use personal finance tools or mobile apps to track your purchases and categorize them accordingly. Review your expenses periodically, examining patterns and identifying areas where you may be prone to impulsive spending. Being aware of your spending habits allows you to make more informed choices and adjust to prevent future budget breaches.

About American Consumer Credit Counseling

American Consumer Credit Counseling, Inc is a non-profit 501(c)(3) credit counseling organization that is dedicated to helping consumers achieve financial management through various debt solutions, such as credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education. With the goal of empowering consumers to reach debt relief, ACCC provides a wide range of free personal finance resources that cover topics such as budgeting, credit and debt management, student loan assistance, homeownership, identity theft, senior living, and retirement. By using ACCC’s tools, such as worksheets, videos, calculators, and blog articles, consumers can make informed decisions about their financial future. ACCC has an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). To learn more about ACCC or to access their free financial education resources, visit ConsumerCredit.com.

While some of these challenges might be familiar, like living in an inflationary period, others are completely new. Let’s look at some of the most common financial challenges and how retirees can prepare for the expected and unexpected alike. 

Loss of Identity

Retirees who have spent a significant amount of their lives working, and enjoying the work they do, might be afraid to lose the identity that took them a lifetime to create. This fear is often coupled with the challenge of living on a fixed income, a transition that is often a far cry from the salary raises and bonuses they were previously accustomed to throughout their careers.

Kurt Heineman, financial planner at Vision Casting Financial Planning, said while many financial planners recommend living on 80% of your previous salary in retirement, it can still be a challenge for retirees to get used to a reduction in expenses. Living on a fixed income is made all the more difficult for retirees mourning the loss of their careers, pay and achievements over the last 40 years.

While it often sounds nice to stop working, Heineman said many people experience a sense of loss and grief when they retire.

In order to make the transition less challenging, Heineman recommends considering your reason for retiring and your purpose in retirement. Ask yourself the following questions.

“Answering these questions can help you have a sense of purpose and helps you with knowing how to prioritize your budget and not overspend in the first few years of retirement,” said Heineman.

Long-Term Healthcare Costs

Often, many people will retire before age 65. Those who make this choice are not yet eligible for Medicare and are faced with the challenge of paying for health insurance premiums. Even when eligible for Medicare, retired individuals may find not all health issues or prescription costs are completely covered by insurance. This results in the challenge of retirees either self-funding these costs or finding supplemental insurance programs that may fit their needs.

While it’s important to consider healthcare costs well in advance before retiring, Mindee Kissinger, investment advisor representative at OneDigital, said those already in retirement may partner with a financial planner to ask questions and receive careful consideration and education about healthcare topics.

Working alongside a financial planner may allow you to determine which options are the best fit for you to close the gap between your retirement date and Medicare eligibility, like COBRA or a spouse’s healthcare plan if they are still working. Those who reach Medicare eligibility may discuss with a financial planner what they need to know about Part A for hospital costs (after deductible), Part B for additional medical costs with an annual premium and Part C for prescription coverage.

“Unfortunately, I have seen many times where people in retirement aren’t prepared for how high these costs can be,” said Kissinger. “I suggest seeking out quotes for long-term care insurance as soon as possible, as they generally get more expensive the longer you wait. Be sure to get multiple quotes for amounts the policies would pay for monthly care, what facility coverage is provided, as well as understanding the caps on how long the policy would pay those benefits. Most financial planners should have a good understanding of walking you through these options, and/or they will partner with an insurance specialist to assist.”

Debt

While some people enter into retirement without debt, this is not true of all retirees. People who enter into retirement with debt may struggle to pay it off and find it puts a strain on their golden years.

Katie Ross, executive vice president for American Consumer Credit Counseling (ACCC), recommends retirees struggling with debt consider free credit counseling.

“A credit counselor can help people strategize a way to save money or reduce expenses to try to free up money for paying debt,” said Ross. “They can also refer retirees to other government resources for further assistance.”

Sequence Risk

Sequence risk, also known as sequence of returns risk, is the risk that comes from the order in which your investment returns occur.

“This risk largely matters for those entering, or already in, retirement,” said Kissinger. “Large drawdowns in returns at the same time withdrawals are being made can potentially reduce the longevity of your investment portfolio, sustaining future income.”

Sustaining income is one of the most discussed concerns among retirees. In a period of increased market volatility, which has been seen throughout 2022, people have heightened concerns about their future income.

Retirees working with financial planners to address their healthcare concerns would be wise to work alongside professionals that understand portfolio construction and financial market trends. Kissinger recommends having a clear withdrawal goal set and managing your investments in an asset allocation set specific to that goal.

“If a market drawdown were to occur, the risk budget of that allocation should not exceed your maximum loss,” said Kissinger. “Other strategies that help mitigate sequence risk include bucketing cash for one to two years of income, equity loans, reverse mortgages or laddering bond portfolios.”

As a side note, remember that these options come with various risks and expenses. Each should be carefully considered with the assistance of a financial advisor, tax professional and estate attorney.