One of the tell-tale signs of inflation is when you start paying a higher price for the same goods and services you used to afford at a lower cost. This is most evident in the prices of goods when you go to the supermarket. You may also experience a similar trend when you pay for gas, transportation, education, utilities, or medical bills.
As a result, you may have a lower disposable income and fewer funds to spend than you want or need. This situation can make fulfilling your more challenging even if you’re employed. In some cases, increasing your income or applying for quick cash loans Philippines lenders can approve will help keep you afloat, especially if the budget is tight. Still, this is a short-term fix for dealing with rising inflation rates. If you want a long-term solution, consider these six recommendations:
Assess Your Spending
One of the best ways you can manage the effects of inflation is by evaluating your spending and removing any unnecessary ones. For example, you can reduce your nonessential spendings, such as travel and entertainment. Even if you reduce these parts of your expenses by just 5%, it can positively impact your purchasing power.
On the other hand, be sure to be strategic when it comes to your necessary expenses. Choose generic brand products and prescriptions when shopping. You can also use store loyalty programs or membership cards to trim your expenses and take advantage of special discounts or promos.
Look for Opportunities to Save
Aside from evaluating your spending, you should also be more active in looking for ways you can save. This may mean waiving your credit card or bank account fees, like annual membership charges. As much as possible, withdraw money from your bank’s ATMs to avoid withdrawal fees. It also helps pay your credit card bills on time and in full to ensure you won’t be charged late fees or higher interest.
Another way you can save some money is by reducing the number of subscriptions you have. See which ones you don’t use as often and consider canceling them. Also, routinely audit your subscriptions, as some might sneak in a price increase after some time. While these little adjustments may feel like minor savings, you’ll realize their effects on your finances once they accumulate.
Put Your Money in the Bank
If you want to soften the blow of rising inflation rates, keeping your money in the bank rather than storing it in your closet or wallet is a good idea. Depending on your bank, your money has the potential to grow from 0.10% to 0.25% a year when you deposit it in a savings account. This allows the value of your money to continuously earn instead of remaining stagnant.
Additionally, maintaining a savings account can encourage you to keep pooling your income in one place. This way, you will worry less about funding emergencies like home repairs, hospital stays, or temporary loss of income.
Consider Learning High-Paying Skills
Another way you can protect yourself from inflation is to acquire skills that will keep you relevant. A skilled worker in an industry with high demand opens more job opportunities. It also allows you to negotiate a more competitive salary because the people in charge will put more value on your expertise. If you don’t know where to start, consider researching emerging fields and skills with growing demand, like programming or data analytics. There are also recession-proof skills like accounting or healthcare servicing.
Explore Other Sources of Income
Increasing your cash flow is an intelligent way to keep up with rising inflation rates. If you’re currently employed, it’s a good idea to seek additional sources of income. It can also serve as a safety net if you lose your job. You can look for a side hustle to help increase your earning potential. You can find part-time jobs, invest in stocks, or explore small business ideas.
If you have some funds saved up, consider protecting your wealth from rising inflation rates by investing it. Talk to a broker or financial advisor and find out how you can make your money work for you. Your financial advisor may suggest trading in stocks or investing in mutual funds, depending on your risk appetite. Alternatively, you can invest in companies that can keep up with inflation rates. Typically, these are companies in the healthcare and energy sectors.
Like most individuals, you’ll feel the effects of inflation through the higher costs of goods and services. Although you can’t control inflation, you can manage its effects on your finances through these recommendations. Aside from protecting your current funds, these suggestions can also help you prepare for further events affecting your purchasing power.