Preparing Your Finances For Cold Weather

Inflation is finally slowing down, but nevertheless, household budgets continue to climb. With higher-than-normal prices for food, clothing and other essential goods, many consumers are understandably concerned about the upcoming cold weather months. Winter typically means a rise in expenses—but it’s not all bad news. Read on for a quick rundown of what expenses to expect when the cold weather hits, and how to mitigate some of the costs.

Heating Bills

The National Energy Assistance Directors Association has said it expects a 10.5% rise in home heating expenses for the coming winter. People who heat their home via electricity may see the highest cost jumps, due to the ongoing impact of climate change-related weather events which make it more expensive to maintain the electric grid.

To budget ahead, carefully review your household’s utility bills from last year. Tack on an extra 10%, and start saving now. On the other hand, you might make a plan about how to reduce heating costs this year. Check in with your local utility company to see if they offer any free energy audits, incentives or advice to help your home become more energy efficient. Beyond that, sealing air leaks, dressing in layers and investing in a rubber hot water bottle are small actions which can have a big impact on your heating bill

Winter Preparation Expenses

Preparing for winter ahead of time almost always means less money spent in the long run. Give yourself enough time to shop for coats, hats and gloves at secondhand stores, instead of racing out to purchase everything new the night before the temperature drops. Now is also the time to address any home maintenance issues which may worsen over the cold weather months. In terms of vehicle winterization, check in with local weather predictions to see what conditions may be coming your way. It’s usually a good idea to check your tire pressure, battery and brakes; and depending on the weather, you may want to switch to winter tires and wipers. Remember: an ounce of prevention can save you the personal and financial cost of an accident later on.

Grocery Budgeting

After the increase in retail food prices following the COVID-19 pandemic, many families in the U.S. are still struggling to get a handle on their monthly grocery bills. Food expenditures tend to rise in the winter, so smart grocery budgeting is even more important when temperatures drop. Bulk buying and meal planning can shave hundreds of dollars off your monthly food bill, with plenty of advice and recipe ideas available for free online. In addition, do a little research to learn what’s in season in your local area each month. Seasonal ingredients tend to be cheaper, so you can save money by planning your meals around those ingredients. Finally, if finances get tight, visit your local food pantry. Eligibility is typically self-declared, and pantries are designed to welcome people with both short- and long-term needs.

Maintaining an Emergency Fund

Experts recommend maintaining an emergency fund that contains three to six months of living expenses. Having a robust emergency fund is particularly important in winter, when many households are more likely to be impacted by house or car trouble. If you don’t already have an emergency fund, take a look at your current savings and checking accounts to see what cash might be available to move into a separate emergency account, which you don’t touch until a rainy day (or blizzard) occurs. Keep emergency funds liquid, so they can be easily accessed in case of a burst pipe, a dead car battery, or other worst case winter scenarios.

Planning Ahead

As always, the best way to mitigate the impact of seasonal costs is to plan ahead. Start budgeting now for essentials like heat and groceries, and get more tips on building an emergency fund to help ensure financial stability during the winter months.