Inflation rates in different countries have been seeing a staggering increase for the past few months. Unfortunately, a growing inflation rate will mean your money’s buying power will be weaker and lower than how it was several years back. So How to Save Money in These Inflationary Times? Here is the answer.
With the current situation of the worldwide economy, you might be wondering if it is the best time for you to save money. Well, the good news is yes, it is. If you let your money sit idly in your bank account or stash some cash under your mattress for longer, you will be losing more to inflation with every passing day.
How do you offset inflation’s negative effects on your wallet to help you achieve your financial goals? Here are a few tips on how to save money in these inflationary times:
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Build Your Emergency Fund
One of the best ways to avoid bad financial situations every time surprise expenses occur is to build an emergency fund. Imagine your electricity or insurance bill going up all of a sudden but you didn’t consider it when budgeting. Inflationary times mean these situations may happen more often.
To build a financial buffer, allocate a specific amount of money monthly. Your emergency fund must cover a minimum of three months’ expenses. The size of this fund will also depend on your present life situation.
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Continue with Your Investments
It is a good thing if you already have existing investments, whether in property or bonds. But the inflationary times shouldn’t make you halt your investing.
Think of new investment methods but make sure you calculate your return on investment necessary to offset the negative effect of inflation at least reasonably.
Always consider your ROI and never invest in something that will only lose its initial value after some time, like investing in an apartment renovation or getting a brand-new car.
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Increase Your Earnings
The best way to save more money in these inflationary times is to try to earn more. Sadly, it might be easier said than done. Thankfully, you don’t need to spend a long time to improve your qualifications just so you can increase your monthly savings.
Here are a few ideas to help you get extra income to allot more money for investment or emergency funds:
- Look for side gigs such as consulting, pet-sitting, tutoring, and others.
- Sell stuff that you no longer use on online portals.
- Talk to your employer if it is possible to make adjustments to your salary according to the current inflation rate.
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Cut Down on Your Expenses
According to experts, you only need to change two things if you want to save more money, and these are your earnings and expenses. While earning more might take some time and effort on your part, cutting down your spending will make you see results faster.
To spend less without affecting your living standards, try to prepare an Excel sheet and list down all your bank accounts and the financial information in each one. The idea here is to know the main categories of your expenses and determine where most of your budget goes. Think of the services or products where you can cut your expenses, such as:
- Bills
- Clothes
- Eating out
- Internet
- Monthly subscriptions
Use these tips and save more money even in times of high inflation rates.