Inflation reached 9.1% in June 2022. It is the highest combined 12-month inflation rate since November 1981. And consumers are at the forefront feeling the biggest pinch with the increased price of daily necessities.
- The food index has increased by 10.4%.
- The energy index rose by 41.6%.
- And the rent increased by almost 1% in the last month.
There has been a lot of pressure on people’s wallets. This is because people are trying to save every penny they can to ensure expenses of daily necessities are met.
As inflation will not ease up anytime soon, we can only focus on what is in our control — managing expenses and practicing money-saving strategies.
How To Deal With Rising Inflation?
Inflation is a silent budget killer.
It is the reason why your grocery shopping has started to feel heavy. During a good year, inflation can cut back buying power by 2%-3%. But, the same cannot be said for when inflation is at its highest in the last four decades.
The best way to fight inflation is to return back to the basics. You must know where your expenses are and where you can cut short.
Here are a few actions you can take to reduce your expenses and save money.
1. Start Investing
Investing is the key to fighting inflation. When we talk about inflation, we are talking about the value of your money dropping. For instance, the value of a single dollar can help you get candy.
But after one year, you won’t be able to buy the same candy with the same dollar. Probably, you would have to be something more than a dollar.
So, what do you think, whose value has increased and whose value has decreased? The value of the candy has remained the same. That is why you had to use more dollars to buy the same candy.
Now relate the same example to investing. What if you bought the same candy for one dollar and held it for one year? And when you sell the same candy next year, you will get more than one dollar.
That means you have earned a profit, even if the inflation has made the dollar weak.
By this example, you must have understood the importance of investing. Investing is the key if you want to save your wealth to multiply and not shrink.
Today saving your money is like waiting for inflation to take over the exact value of the money. You might save one million. But the worth of million will not decrease with time.
Instead, you can invest in assets like real estate, stocks, and Cryptocurrencies where you can make your asset earn money for you.
2. Find Ways To Reduce Expenses
You might try to offset your expenses by going through your bills, re-organizing them, and cutting the expenses that are not necessary.
Well, that can be the first step to start saving money, but not the last step. When we talk about money-saving tips and strategies, it encapsulates every effort to save money everywhere.
We often shop around to get the price of our insurance, data pack, and other things. But over time, the price increases, and we don’t continue to shop around.
Here are a few bills that can help you save a couple of hundred bucks every month.
- Car insurance.
- Home insurance.
- Other recurring subscription packages.
Out of all the bills, you can easily save a lot from the phone and internet bills. Why pay for an unlimited data plan when you are not going to use it? There are other lower plans that will suit your needs better.
You can even look for coupons from third-party platforms like Coupon Blender to get discounts on your product purchase and utility bills.
3. Stop Buying NEW Products
You don’t always have to buy new products. You can get the same product with less price tag if you are willing to buy used. Before buying a new product, always go through your options and see where you can get a good deal on second-hand products.
Financial experts state that people can save thousands of dollars every year if they can spend on things that have been used and are still retaining their shape and size.
There are several websites where the buyers are sellers, and people just buy from those websites. In fact, you can even trade things on platforms like that.
You can also participate in groups that pool resources for everyone. This can help you significantly lower your expenses and help you remain afloat during this inflation.
4. Increase Your Income
The unemployment rate has returned back to the prep and mic level; most businesses are having a hard time hiring good people for their organizations. While it may not be the best time to ask for increased pay, there are professions where the employees are in a better position to negotiate their paycheck.
You don’t have to stick with a job that is not giving you enough for your hard work. If possible, look for a job that respects your hard work and pays you to meet your needs. However, if that is not possible, look for different ways to earn some extra outside your job.
For instance, you can declutter your house by selling things that you are not using anymore and taking space in your house. You can start investing your savings to allow your money to earn money.
5. Saving Money Is Easy
Yes, saving money is easy. You just need to keep in mind that you will only allow yourself to pay for necessities. If there is something you don’t need or without it, your life will be the same, don’t buy it. This will not only help you save money, but you will also have access to liquid cash when you need the most.
While we would like to discuss some more, the article has become long enough. If you are interested in carrying on with the discussion, we can carry on in the comment section.