In these increasingly tough financial times, it is no surprise that people are starting to think about the household budget and what can be done to save a little more money. Or at least get the spending under control.

I’ve got a guest post up over at Budgets are Sexy. It’s all about how the first rule of budgeting is to get your priorities straight. Head on over and give it a read.

Because it’s September, I’ve been seeing some Christmas stuff slowly appearing in stores. Sure the Halloween decorations are more plentiful (no Thanksgiving items, though), but all the black and orange can’t hide the red and green just a few shelves down.

And retailers may need all that Christmas gear out early this year because they need more time to sell it. According to the National Retail Federation, this year is expected to be the worst holiday performance in six years. BloggingStocks explains why:

These experts are right. It will be much worse. Retail sales are likely to drop compared with last year. Unemployment stood at 6.1% according to the most recent measurement. If layoffs at big companies continue, that number could be 7% in the next month or two. With Wall Street firings a lot of job loss is at the high end of the economy where people tend to really spread around the cash during the holidays.

I know we’re cutting back on the holiday spending. Just last night my husband turned to me, sighed, and said, “I think we’re not going to be able to spend as much on gifts this year.”

I agreed.

And not just because we want to put in a yard next summer. Our household budget has been depleted a bit by the rising costs of food and energy. While we do our best to live frugally, there is no getting around the fact that the bread that cost $2.35 a couple of months ago now costs $4.20.

As for gas prices — I was thrilled yesterday to find that we *only* spent $32 (we refill at a little more than half a tank). How easy it is for us to adjust to the current market conditions. Just a little over a month ago, we were spending more than $40 for the same amount of gas. Of course, compared with this time last year, things appear a little out of hand.

The bottom line, though, is that we just can’t afford to do the same sort of holiday shopping we did last year. So we won’t.

Will you be spending less on holiday shopping this year?

image source: sxc.hu

Right now, with the economy struggling and household budgets slowly imploding, many people are concerned with what the presidential candidates will do for their personal bottom lines. Indeed, the flap over who is a “financial elitist“, and who is more likely to understand “ordinary” Americans on a personal finances level is becoming one of the issues of the presidential race.

I’m interested in your thoughts on this: Who will better for your personal finances: John McCain or Barack Obama?

Vote below (or in the sidebar), and even leave a comment if you would like to elaborate.

With the U.S. unemployment rate on the rise (and expected to rise higher), that seems to be the Big News for now.

But what about underemployment?This is probably becoming a problem for many people as well — especially as the economy leads to cutbacks in various workplaces.

What does it mean to be underemployed?

Underemployment occurs when your skills are not properly utilized. If you have the education and skills to work in a higher paying job, but you are working in a low-skill, lower paying job, you are considered underemployed. Underemployment is also defined as someone working part-time when he or she would prefer to work full-time.

Right now, companies are cutting back in some areas. Some workers are finding their hours cut. Others are being let go and are forced to take jobs that do not fit their skills. This in term affects household budgets. And, while underemployment is not as devastating as unemployment, at least there are federal unemployment benefits to help you muddle through until you find a job.

For many of the hard-working, underemployed folks out there, though, there is no such help. When hours are cut, or a newer, lower-paying job is found, often the underemployed finds that he or she makes too much to qualify for assistance, but not enough to maintain the same quality of life.

image credit: sxc.hu

I recently read a story on CNN Money about what consumers are cutting back on in terms of household budget. It was a look at what people say they are willing to decrease their spending on when it comes to consumer items. Interestingly, though, it appears that Americans are trying to maintain their creature comforts. Quality of life is something that Americans are trying not to sacrifice at this time.

Some of the interesting findings by the survey done by GfK Roper Consulting include:

• 50% of Americans plan to buy a new TV in the next year (flat panel or high definition). This is instead of going out to movies and spending money on other forms of the home entertainment. Another item not being cut right now: subscriptions to cable and satellite.
• 59% of Americans are going to make a trip of at least 100 miles this year. But chances are that they are less likely to be going to other countries, and more likely to look for frugal activities in domestic locations.

I know we’ve been cutting back. We decided to severely limit our trip to New York City this year, and we’ve been making an effort to make more meals at home, eating out much less than we have in the past.
Is there anything you are cutting back on to save money at this time?

image credit: sxc.hu

Not too long ago, I wrote about the “recession diet.” While we may not technically or officially be in a recession, many people are nevertheless feeling the pinch. And with food prices rising, it is no surprise that Spam is seeing an increase in sales (hat tip: Miki at Leadership Turn).

Yep, items that are considered “downgrades” are seeing a rise in popularity as households try to squeeze the most of their hard-earned dollars. Discount stores are seeing some success as well with people turning to the off-brands that are found at dollar stores and similar businesses.

Are you buying things differently because of new household budget constraints?

image credit: Matthew W. Jackson

If you’re like me, it’s time to make an adjustment in the monthly budget. The dairy that we use is announcing increased prices on milk, cheese and eggs. And the fuel surcharge for delivery has gone up. Again. Not that we mind that much. After all, we like supporting local businesses — especially those with sustainable practices. But it does mean that we’re making adjustments.

But we’ve noticed a change at the grocery store as well. Food costs more. And we all heard about that panic-induced trend to hoard rice a few weeks ago. (Disclosure: I did not hoard rice. There is nor reason to, since the US is not experiencing a rice shortage.)

So is wheat the next target? Probably not. In fact, the wheat harvest is likely expected to be very good this year. But that isn’t changing the rate of food prices inflation on items like bread and pasta. Why is this? Wheat prices are dropping, and the harvest should be abundant.

The answer is in other issues. Harvesting wheat requires energy. And all the steps in between — the steps that take wheat and turn it into flour for bread and pasta — take energy as well. And energy prices are going up. Then you have to transport the food to wherever it is going. So that adds to the cost.

So, it is time to accept that, right now, even with economic stimulus tax rebate checks on the way, it is time to think about what you are spending your money on. Because more of it is going to be spent on food.
image credit: US government

It’s a good thing summer is on its way. We’ll be planting a garden soon, and that will help us alleviate some of the impact that food prices inflation will have on our household budget.

Right now, the big story is that oil prices hit $114 a barrel yesterday. People are talking about gas prices. And it’s true that gas prices are going to take a toll on many a household budget. They probably already are.

But with the release of the latest inflation data from the Labor Department, it’s apparent that we all need to be mindful of food prices inflation as well. AFP reports on wholesale costs:

“Wholesale costs are rising and the consumer should expect more shocks at the supermarket and the gas station,” said Joel Naroff, the president of Naroff Economic Advisors.

What does this mean for you? It means it’s time to prepare. If you can,  plant a garden. Even a container garden can be helpful in terms of providing fresh, low-cost produce for your table. Try to plan your trips, and consider the types of things you buy. It may be time to cut back on some of the unnecessary items that you purchase each month.

Core inflation takes out food and energy costs, and it shows a very manageable 0.2 percent. But that doesn’t represent reality for most American families. Energy and food are the biggest expenditures — and they have the biggest impact on the household budget.

What are you doing to prepare for gas and food prices inflation?

image credit: Tijmen Stam