TEMPLE, Texas — Where is our money going? With this inflation cycle it just seems that we have too much month left at the end of our money. Well, in this Money Talks, 6 News spoke to a professional and asked where he's seeing all of our excess money going to.
"When doing budgets and looking at things with clients and looking at finances and looking at the overall picture, the number one that I’ve seen, and there may be other advisors that are different or other planners that are different, but the number one that I have seen is food," Financial Planner Rolandus Johnson told 6 News.
Johnson is right on the money! According to the Wall Street Journal, in 2022, Americans spent 11.3% of disposable income on food, that was a 30-year high, up from just 5%!
"Now, you have your other staples on that list, entertainment, you know, shopping, things like that, they are always going to be there because those are luxury items that we partake in," Johnson said. "But food has increased by so much and that's where a lot of budgets are suffering right now because you had a $300 budget maybe three years ago, that was fine, but that $300 dollar budget from three years ago has increased to maybe $400 to $500 dollars a month.”
Why do we think that is? Johnson says it's not just the goods, it's also the services.
"Eating out and delivery services, their prices have increased or almost doubled over the past couple of years," Johnson told 6 News. "So yeah, food has been the biggest culprit of budget downfall so far."
Johnson told 6 News that one of the best things that you can do for your budget is have that emergency fund so that with things getting so much more expensive, one thing won't derail you!
"That's the smartest thing if you ask me," Johnson said. "That's one of the things in the budget that I don't compromise on because emergencies happen. And so having that emergency fund is absolutely the smartest thing that you can have these days. I know that everybody's percentage or number is different, but you've got to have it. It's something that's a non-compromise..... You just can't compromise on having that emergency fund or whatever you call it, but you can't compromise on having that."
According to Bankrate, 72% of U.S. adults are comfortable with their emergency savings and have enough to cover at least three months of expenses.
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