How to Deal With Inflation

[Jasmine]

You might have noticed inflation is rising in your country. Inflation means increase in the prices of commodities and decrease in the purchasing value of the money.

Here are three ways to cope up with the inflation

Keep your budge flat despite rise in inflation. Let me exemplify, if you were spending $1000 per month before the inflation, continue to spend $1000 even though the price has gone up and your money cannot buy the same thing. In order do so you will have to re-arrange your lifestyle so that you can maintain your lifestyle for the same amount.

Buy stocks. During the inflation, businesses lose profits; therefore, stock prices go down. Start buying stocks from the established companies.

Invest in government bonds. This is the most secured form of investment, whether there is inflation or no inflation. It is even better during the inflation. When inflation rises, government increases interest rate, therefore, you will be earning more from your bonds during the inflation.

 

[Mika]

These are certainly effective strategies to cope with inflation. When there is inflation, the price of everything will increase, including essentials like food, clothes, utility services, etc. When the price increase, your money cannot buy the same thing for the same price. In other words, you could buy a cup of coffee for one buck before the inflation, but now you will be paying $1.20 for the same cup (just an example). How do you deal with a situation like this? You either need to earn more to pay your bills or spend less so that your monthly bill does not exceed. For instance, if you were drinking 6 cups of coffee and spending $6 every day, with the current price of $1.20, you will have to drink just 5 cups of coffee so that your coffee bill remains constant. If you have saved money in the bank, it is time to withdraw your savings so that you can invest in stocks or bonds.

 

[Ayuba Ernest]

No one likes to see the prices of their favourite products and services go up. But unfortunately, inflation is a part of life. How can you deal with it?

There are a few things you can do to help manage the effects of inflation:

1. Review your expenses regularly

Take a look at your budget and see where you can cut back. Are there any areas where you can scale back? Perhaps you can switch to a cheaper brand of coffee or drive less often to save on gas.

2. Invest in inflation-proof assets

There are certain assets that tend to do well when inflation is high. These include things like gold, silver, and real estate.

3. Adjust your investment portfolio

If you have investments, make sure to adjust your portfolio accordingly. For example, you may want to increase your exposure to inflation-protected securities.

4. Keep some cash on hand

It's always a good idea to have some cash in savings. That way, if prices start to go up, you'll have the cash to cover the costs.

5. Don't panic

Remember that inflation is just a part of life. It's not the end of the world. As long as you take steps to manage it, you'll be just fine.