Chicago Consumer Spending Is On the Rise – Or Is It?
Consumer spending in February increased at the quickest rate in four months, the first time the economy has showed signs of life in some time. But as it turns out, most of the spending was on one thing - gas.
With gas prices hitting new highs of $4 a gallon in some cities, economic indicators might be a bit skewed, point out Chicago bankruptcy attorneys. And things were just starting to look up - last quarter saw the highest spending growth in years, at about 4 percent. Now economists say that thanks to rising fuel costs, that number could drop by half for the first few months of 2011. So what's a struggling consumer to do?
There are the obvious solutions - drive less, carpool with co-workers, downsize to just one car, take public transportation. Buying a brand-spanking-new hybrid probably won't save you money for quite a few years, but trading in your current gas-guzzler for a good-priced pre-owned vehicle with better mileage can sometimes pay off.
But those of us who are more-or-less stuck paying for gas are going to have to get creative, and a family budget can help. If you're not tracking your spending, you're not fully aware of where your money is going. Paying $3 for coffee here, $2 for a bottled water there - these are the costs most of us forget about. With a budget, you can easily view every expense you have, from electricity and the house payment, to cable and that automatically-renewing magazine subscription you probably don't even remember you had.
If gas makes it to $5 a gallon this year, and the average driver fills up twice a month, a person with a 15-gallon tank may end up paying an extra $500 more this year - or, about $1,800 instead of $1,300. By making a cut or two from your budget, you might be able to help ease that new burden, if not erase it completely. How about cutting back your pricey $75 cable package to the basic $25 - or canceling it and signing up for a $10/month Netflix subscription?
Of course, maybe it's unrealistic to think you'll have to trim hundreds of dollars from your budget each year - as the cost of living goes up, you're eventually going to need to earn more money. Hopefully your employer will cooperate - but while you're waiting on that raise, there may be another way to increase your income. Are you making monthly payments on debts? By lowering or eliminating debt balances, you lower or eliminate payments. That means more money in your pocket each pay period.
If you can't afford to reduce debt, bankruptcy can be an effective alternative. You can learn more about what bankruptcy can do to free up your finances when you try a free personal debt analysis with a professional Chicago bankruptcy attorney.