You cannot stop inflation from happening. Prices of goods and services will go up. It is all part of the economic cycle. For as long as you are a consumer, you need to start caring about inflation because it will affect you whether you like it or not. No one is exempted from the pain of having to go through the rising prices of goods and services, wherever you are in the world. The good news is that there are some things that you can do to protect yourself from inflation
Here are some ways on how you can combat inflation:
1. Increase your Income
The best way to combat inflation is to increase your income. In the short term, if you are a business owner, you can look for more customers. If you are an employee, you can negotiate with your boss for a raise or you can do freelance work.
For the long term, you can learn how you can let money work for you.
2. Minimize your Spending
If increasing your income is not an option for now, try to minimize your spending. You can do this by tracking your expenses then analyzing them. There are many ways to reduce your monthly expenses. For starters, you can eliminate the non-essentials. You can also find alternative products especially if your regular brand becomes too expensive for your wallet, try out different brands. You might be able to find something that is cheaper but of the same quality.
Also, try to stick to your budget. A good way to balance your expenses and slowly build your wealth at the same time is to follow the Money Jar Budgeting System.
3. Stockpile items.
Instead of buying on a per need basis, try buying items on wholesale. There are many supermarkets nowadays that sell items on wholesale. You will be saving a lot of money because generally, wholesale items are cheaper. In addition, you are protecting yourself from the monthly inflation.
Inflation will rob you if you just put your money in a regular savings account. You need to invest your money to an investment vehicle that offers a higher rate of return compared to the inflation rate.
Invest in paper assets. Paper assets are investments on paper that represents ownership of certain assets such as bonds, stocks and funds.
You can also invest in real estate. More often than not, the value of real estate increases over time. In addition, if you buy using a mortgage of a fixed rate, your cost of debt or monthly amortization will be much cheaper in the future compared to what you are paying now.
You can also invest in other asset classes such as gold, silver, art works, antiques and vintage Items and investment watches. History shows that values of alternative assets increase over time.
4. Invest in yourself
The best investment that you can make is to invest in yourself. If you develop yourself, your value will grow over time. Developing yourself does not necessarily mean that you need to go back to school. You can improve yourself by reading books, attending seminars or learning from mentors.
If you continually develop yourself, sooner or later, the amount of money that you will receive for payment of your skills and services will also increase.