Inflation can feel like a tug of war, where your wallet is getting stretched thinner and thinner by the day. It can actually take a real bite out of your budget. Inflation affects you as the cost of routine products continues to rise exponentially while the income increase is sadly not proportional.
Higher costs of products mean you may need to be more strategic about spending to cover your expenses within your income. Given the economic conditions in the country, it is high time to look at your personal budget. Let’s talk about how you can budget your way through the rising prices, by taking some steps and avoiding some actions.
Set a Budget a Plan
Most of us don’t have a budget set for the month. First of all, you have to set a budget. It is a plan to spend your money. So, make a solid plan to spend your money. You need to know, what you are spending your money on. This will help you to prepare your money for whatever is coming — even inflation.
Secondly, you need a zero-based budget. This method encourages you to spend every penny of your income wisely and it will give every cent a purpose. Once a budget is set-up, you can practice a few things to reduce the impact of inflation on your budget.
Review Your Spending
The first and foremost step to manage your budget is to see how and where you are spending; is the spending worth it or you can manage without spending where you are? Inflation isn’t going to affect all areas equally so it is vital to track your spending. You have to be more mindful while spending on different household necessities. We aren’t aware but mostly, we spend on a lot of unnecessary things.
Ask for Pay Raise
Wages are usually raised during inflation. So, one should talk to the superiors about it and ask for a pay raise. You can mention during an annual review that the prices of commodities have risen and your wage needs to be adjusted accordingly. This is also a good time to negotiate work-related costs. For example, work from home can give you some relief in terms of transportation expenses.
Ease Up On Your Fuel/Energy Usage
The ever-rising energy prices are the biggest drive behind inflation but it is really hard to live without gas, heat or electricity. However, you can always cut down on your requirements of gas and electricity. One way is to reduce the number of trips for different errands. You can also carpool for going to work/school. This will also save fuel expense. Look for energy leaks and appliances’ inefficiencies, they also add up to energy consumption. Try to opt for energy savers to save electricity. Make sure to turn off extra lights and fans in the house. Use washing machine once it’s loaded fully. Don’t waste energy on washing few clothes.
Buy in Bulk
Buying in bulk is a very good idea during inflation. If you see a product at a good price or let’s say on sale, then buy it now. The prices of products tend to increase in inflation. Buying in bulk will help you save the extra cost. You can use the product later, whenever needed.
Try to Save More
Try switching to more generic products rather than opting for brands. This will definitely save some bucks. The most important necessities should be covered first. Try to shop at the cheapest grocery stores. Try to cook at home with rather than dining out. Try to limit your wants and buy the items that you need. You can rent out the spare room or a portion in your house for extra income. This will definitely help you save some money. Buy clothes only when needed. Basically, cut your spending as this is the only way to save money.
Look Around before You Shop
Visit multiple websites before making an online purchase. Likewise, explore different shops/stores before shopping in-store. This way you can choose the one with the lowest prices. Also prefer stores that offer some discount coupons or sale products. Try to shop from stores which are closer to your house. This will also help you to save on fuel.
Switch and Adjust Budget Lines
Sticking to your budget is always a good idea but adjusting budget lines once in a while won’t harm you much. For example, the money saved from the electricity bill can be utilized on something else that you need. Basically, you are just moving out the money from one budget line to another. Lowering a budget line is such a relief.
Remember Your Priorities
Don’t forget your financial priorities, more so during inflation. The rising cost of everything makes it difficult to make ends meet. So, do not live on credit cards as accumulating debt can be troublesome for you in the future. Continue to save and invest money for future as well. You cannot control the economic condition of the country but you can always control your own finances.
Earn Extra Money
Inflation makes your budget tight, so why not earn some extra money to ease out the situation. Use your skills to earn more money. You can always opt for freelancing. You need to put some effort in earning some extra money. Try changing your job for a better pay. Who would mind a better salary? You can also sell the unnecessary things at home to earn some extra money. The best thing is to start a small business, which will generate some extra income for you. Each option has its own pros and cons, but your focus should be earning more to combat inflation.
No doubt, inflation is tough but you are tougher. It can make the household budgeting a challenge but if you stick to your budget and cut down on your spending as much as possible, you can come out of it swinging. The more expenses you can cut, the more you can save. Once inflation settles down, you will be in a better position to deal with the budget. Remember, inflation is not going to remain forever. You just have to know how to deal with it. Don’t panic and continue to save in a smarter and wiser manner. HH
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