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The recent inflation numbers have shocked the whole world with the levels hitting 9.1%. For consumers, this only means the cost of living will keep going up. Hence, this article will focus on tips on how to survive as inflation hits 9.1%.
With the cost of living rising in the last few months, consumers are cutting back due to the increase in consumer prices.
Recent announcements on inflation numbers just confirm rising inflation trend levels since the beginning of the year. The recent level is more than the previous projections of 8.8%. With this kind of inflation level, the government has no choice but to increase the interest rate.
Below are some of the tricks to survive the current inflation attacks.
· Cutting back on luxury spending
The high cost of living calls for a cut back on non-essential spending until such a time when the costs are back to normal. This will help in saving some much-needed income for use on essentials.
Some of the areas you can target to cut back are on eating out and entertainment. These are wants and should be kept minimal.
The goal is to survive this period comfortably until a time when the rise in prices is brought under control.
· Less borrowing
One of the traditional ways to control inflation is through increasing interest rates. This approach is meant to limit people from borrowing. Hence, reducing the amount of money in circulation.
Due to the rise in the costs of borrowing, it is wise to go slow in taking credit. Paying high-interest results in the diminishing of your income resulting in lower purchasing power.
Some of the actions you can take to reduce the costs of borrowing are reducing credit card usage and paying your loans on time to avoid costly penalties. Ultimately, once the situation is under control, you can then resume the normal debt levels.
If you also have a running facility, you should engage the lender for restructuring or increase in the tenor. This will allow you to pay less. A reduction in the installment will be a good boost for your cash flow in the short term.
Perhaps this is one of the most important strategies you should use right now to survive as inflation hits 9.1%. Investing should be a substitute as savings will only get less with time due to inflation. As an example, if you were saving funds a year ago, they are now worth 9.1 % less.
Hence, focus to put your funds’ in places where you can receive lucrative returns. If possible, the returns should be more than the inflation levels. That is the only way to ensure you are deriving value.
Anything lower than the current inflation levels will only result in a loss in value.
You can also target to invest in deflationary assets such as commodities. The advantage of such investments is they are not affected by inflation and act as a store of value. One key example of such assets is gold.
The good thing about commodities is you can’t create them artificially. Unlike fiat currency, they have predictable supply levels.
· Embrace the alternative to oil
One of the factors driving inflation is the high prices of oil in the market. To mitigate this, you should embrace alternatives such as using electric vehicles.
At the current prices, they are cheaper and more environmentally friendly to use.