Though the Russian invasion of Ukraine is thousands of miles away from the US, there has been immediate impact on Americans, many of whom are just recovering from the pandemic and are worried about how to make ends meet.
Gas prices have now skyrocketed nearly 50% compared to March of 2021. Numbers from vehicle valuation company Kelly Blue Book shows that the average owner of a full-size SUV is now spending $110 more each month on gas, while compact car owners are paying $60 more a month.
With risings prices beyond consumers' control, it's now time to take a hard look at your budget and focus on your needs, according to finance advocate Berna Anat.
"Now is the time to work with what you've got. When in times of crisis, in times of inflation, we need to turn around and review what we're working with and focus on paring down. So some financial educators call this your 'noodle budget' or your 'ramen budget', because it's like worst case scenario, if you had to survive off of ramen off a cup of noodles. What are the things you absolutely have to pay for every month? That's almost like budget level one," Anat said.
Anat, who shares healthy finance tips on social media, stressed that it's not the time to get emotional and panic as long as you truly know your financial state and plans.
"When something like inflation happens or a financial crisis in the world happened, the first thing we do is panic. The first thing we do is get emotional and start to go, 'oh my gosh, I got my money.' A budget is hard and fast math. It tells you exactly what's going on what you do have, what you can cover, and what you can't. When you build a budget for yourself, only build a spending plan for your next paycheck. A lot of that anxiety goes away because you know what you have, what you don't have; it's all on paper."
Anat also pointed out that one easy way to cut from spending is on the things that are clearly for comfort.
"A lot of us have, for example, gotten used to a lot of comfort things inside of the pandemic; comfort, subscriptions, places that we go out or we pay for things to get delivered to us for comfort. We can cut those things out now that things are opening up a little bit more. We can now sort of cut out those convenience comforts," she said.
Anat added that pausing on big ticket purchases and investments is also a wise move. "Financial crisis like this, what you have to do, the sacrifices you have to make, it's just putting a temporary pause on certain things. So you're putting a temporary pause on the things like paying off massive amounts of debt, or putting a temporary pause on putting extra towards your goals like saving for house or saving for a car saving for vacation. What's the most important right now is putting on your financial oxygen mask."
Even with the rising gas prices likely plateauing in the coming weeks, financial advocates like Anat recommend keeping to 'noodle budgets' and holding off on new major investments, as the world waits for calmer seas.