Families find ways to save with rising gas, food prices

More than twice in the last couple of days, Leslie Stichka has watched people clear out their 401Ks “just to get by” after a layoff. Others have made repeat visits to her workplace at the Ridgeview Road Hy-Vee’s Community America Credit Union to dip into their savings accounts and other investments for more spending money.

“Definitely with food and gas prices, there is more of a pinch since they are something we all need to make our daily lives work,” said Stichka, the branch manager. “It’s hitting people hard.”

And with bank features like online and over-the-phone transfers, it’s gotten easier and easier for people to remove money from savings to make up for the increased food and gasoline prices.

“People sometimes treat savings accounts the way they are treating their spending accounts,” Stichka said. “You take $100 here and $100 there, and when you already don’t have a ton of savings that can go quick. Those savings accounts are so easy to dip into, but if you can wait, it’s going to benefit you in the long run.”

Savings have been part of the daily conversation in Chad Weinand’s workplace. Co-workers ask each other how much gasoline prices went up from the day before. They share tips on how they found bargains at stores. They talk about how it is getting harder and harder to save.

At the beginning of this year, Weinand and his wife entered a financial-makeover competition. In the long run they want to save for retirement and invest in their daughter’s future. Because they made a commitment and a plan earlier this year, Weinand said the family has been able to deal with rising food and gas costs and keep money in savings.

“We’re not scraping the bottom of the barrel as we would have been in the past,” Weinand said.

They already had stopped going out to eat and started using coupons. As prices keep rising, they continue to make adjustments in order to save. He’s considering riding a bike to work. Weinand and some co-workers participated in a community garden this summer. All they spent was an initial $50 for garden supplies.

“It’s paid off quite a bit,” Weinand said. “Every day we have zucchini, cucumbers, tomatoes, and we’re getting it for free.”

Weinand says the family plans to plant another garden in the fall. Though it’s difficult, Nick Pflumm, executive vice president of First National Bank of Olathe, said it is important for families to prioritize and re-prioritize when it comes to protecting their savings accounts. He says it’s a struggle everyone is facing with rising food and gasoline costs.

“It’s important to sit and say, ‘What do I have now’ and ‘What are my options?’” Pflumm said said. “You have to say, ‘Is that a must-have? No it’s not.’”

Nationally, consumer spending seems to indicate that is what people are doing. Sales at discount merchant Wal-Mart rose 5.8 percent and Costco’s sales went up 9 percent in June.

Goodwill stores have seen an increase nationally in in-store sales. When comparing the first four months of 2007 with 2008, sales increased 6 percent.

More locally, sales at Goodwill in Kansas and Missouri have not increased, but they are expected to, said Amy Randolph, Goodwill communication manager for the region.

“Back-to-school is a huge thing, and we’re expecting the sales to be very high this year because people are in a crunch,” Randolph said.

To avoid the “easy way out” of dipping into savings, a person should make it a habit to pay themselves first, said Charlie Walker, a financial adviser for CUSO financial services at Community America Credit Union. This is important especially as prices continue to rise, Walker said.

“Do that first and make the rest of it fit because, guess what, if you wait until the end of the month there will be nothing there,” Walker said. “You need to take care of yourself because nobody else is going to.”

Walker said he often recommends families run their homes like a business with a purpose of making money. Making sure to protect savings is a part of running the business successfully.

“The more profitable your business is the better your life is going to be long term,” Walker said. “Basically you may have to tighten your belt in other areas because in what you plan to save, you don’t want to lessen.”