Inflation will kill your budget if you do not fight back. Luckily there are some ways to protect your money during times like these.
Inflation is the reason why the prices of your groceries are going up. The higher the inflation the lower the purchasing power of your money is. Today the inflation rate is over 8% which means that your buying power is decreased by that percentage.
Save money during inflation. Which are the best ways?
With inflation running wild you can’t just sit back and do nothing. You must fight back and there are some actions you can take. In order to help you save your money through this tough period, we made a list of the best things you must do.
Reduce your costs
Take a close look at your costs and see what you can do in order to decrease them. You can reduce your bill costs in many different areas. You can reduce, the costs of groceries, phone, internet, insurance costs, etc.
Often we don’t take into considerations this kind of things but they can be a killer for your budget. For example why pay the mobile package with unlimited data. Do you really need unlimited data on your phone? You can choose the package with 5 GB and save money.
Plan your meals and groceries. By planning your meals you can be much more proficient when buying your groceries. Take advantage of sale ads, and promotions, buy at stock prices, use coupons, and everything you can use to save money.
You can also buy groceries online and that way you will save gas money. Cashback apps are also one more useful tool that can help you save money.
Revising your insurance policy can be also a good idea. Try to find better coverage for less money.
Find a way to increase your income
After the pandemic, many businesses are getting back to normal and they are hiring. Find a job that will pay you more than the current one or negotiate at the current one for a better paycheck.
Although it doesn’t seem easy to increase your budget overnight, there are many options on how to do it. You can work on something extra outside your job to earn an additional income. You can sell stuff on eBay, Craigslist, and even Facebook.
Also, there are a lot of jobs that don’t require a fixed working schedule and can be done from your home. Babysitting, online tutoring, and working freelance on platforms like Upwork or Fiver are just some of the things you can do for an additional income.
We don’t say that this will be easy, but it is worth trying. This extra money can be more than enough for covering your everyday expenses.
Invest in bonds
If you have money that you won’t be needing in the next year or two you should do something with them, or they will lose purchasing value. Banks don’t provide enough interest rates that would compensate for the inflation, so the smart thing to do is to start investing.
If you don’t need to have access to the money at all times you can invest them by buying a treasury bond. This will help you not lose your money and get an interest rate of over 7% in the long term. The bonds are something like a certificate of deposit.
You place your money for one year and by the end of the year, you will have a secure rate of return that can be even higher than the rate of inflation at the moment. This means that your money won’t lose value and you will earn some income.
This is a great way to protect your savings and the plus side is that these types of investments are considered low-risk investments.
It is always a good idea to keep some cash. You can put some money in an accessible savings account which can be your emergency fund.
Build your emergency fund so that can cover your expenses for three to six months. This cash will come in handy if you find yourself in a bad situation like losing your job. Think of the costs you might need to cover in the next couple of months and start putting money aside.
You can put your money in a high-interest savings account. The more money you save the better. This is a smart saving strategy that can help you in tough situations. So, start saving today.