Inflation Is Hitting Everyone’s Budget. Here Are 4 Ways to Manage Inflation Smartly and Fight Back | Managing Money Series

Inflation is a quiet budget killer.

It causes everything to go higher, from your groceries to your petrol, as the buying value of money declines. During a good year, it decreases your purchasing power by 2% to 3%, but these days inflation is hovering at 4% to 5%, a number we haven’t seen in 40 years.

Malaysia Inflation Rate

You can refer to the inflation trend of Malaysia over here.

You can definitely see that 2022 has a very high inflation rate,

In Feb 2022, the inflation rate is only 2.2%. But in July 2022, it has doubled to 4.4%.

How Can You Battle Inflation Rate

But what does it imply for you? With inflation running wild, it’s hurting more people, but you don’t have to sit idly by while your costs keep growing greater. There are measures to take — and acts to avoid — that may help you through this era of high inflation, for whatever long it lasts.

One thing that’s easy to notice with the current fear about increasing prices is that it’s not effecting everything the same, therefore it won’t affect every family to the same degree. Personal finance is distinct for everyone and inflation rates are just as diverse depending on whether you purchased a used vehicle, how much you drive and if you have a family or are single.

To get a better picture of how inflation is hurting you, compare your expenditures during the first four months of 2021 to the first four months of 2022. A lot of folks may be startled to learn they may not have personally experienced as much inflation as they imagined. For others, the entire weight of inflation might be a considerable financial challenge to surmount.

Regardless of what your specific circumstance is, it’s always a good time to examine your financial choices to ensure they correspond with your objectives.

PRO TIP

During inflation, don’t panic. Find alternative strategies to mitigate inflation like continuing to invest, growing your income or decreasing spending.

How to Deal with Rising Inflation

The easiest strategy to resist increasing inflation is to revert to the basics: Know what you’re spending your money on, have a long-term investment plan and investigate methods to boost your income.

Here are a few activities you may take to reduce inflation’s effect on your life.

Continue Investing

Investing the cashflow you have, outside of your emergency fund, is one method “to stay up with or even surpass inflation.

When you witness increasing interest rates, a collapsing stock market or growing inflation it might force you to second think yourself. But, a properly varied investment strategy should be built up from the outset to cope with ups and downs. 

Find Ways to Reduce Your Expenses

You may be able to counteract some of the rise in your expenditures by taking a closer look at your bills, reducing what you don’t need and attempting to lower or negotiate the remainder. Looking at all your invoices is an obvious place to start.

Common bills that might be eliminated or lowered include:

• Recurring subscriptions
• Phone
• Internet
• Car insurance
• Home insurance

One method to possibly lower your phone expense is with a prepaid service package.

With the popularity of WI-FI an unlimited data package may not be essential.

Revisiting your Insurance coverage might potentially reveal big savings.

Although sifting through your costs and minimizing what’s unneeded is a smart place to start, you’ll always need to purchase basics (food, petrol, accommodation) and a lot of things are more costly.

When it comes to groceries you may save money by being more efficient with what you buy.

Meal planning is an easy technique to become better at supermarket shopping. Look at your schedule and prepare for the evenings you’ll be home and the days you or the kids will need to carry lunch to work or school. Find recipes that employ the same components, she advises. This way you’re more likely to use up that full bag of potatoes or bunch of fresh parsley.

You may also take use of discounts, cashback credit cards and cashback websites to economise.

There are also numerous of options to acquire old furniture, home products or apparel at a substantial discount. Facebook Marketplace is an excellent location to locate products being offered nearby. 

Increase Your Income

The unemployment rate has virtually returned to prepandemic levels and many firms are struggling to recruit. While it may not be simple to boost your compensation overnight, in today’s employment market individuals are better positioned to trade their skills elsewhere or bargain for greater pay.

You may also generate additional money outside of your employment. There are opportunities to sell goods you’re not using on eBay, Facebook Marketplace, Carousell or even Tik Tok Shop. I would take this one step further and think about how you might rent your goods and receive consistent cash flowing in.

There are also a large selection of side employment with a flexible schedule or that may be done from home. Pet sitting, online teaching, or driving for a ridesharing service might be done outside of your 9-to-5 employment.

You may be able to obtain freelance employment at locations such as Fiveer, Upwork or Flexjobs. Although there isn’t always a fast or straightforward method to consistently boost your income, there are solutions for generating more cash to address more urgent expenditures.

Happy Investing! 😉