My country is currently going through a high case of inflation right now, things are getting more expensive by the day, and it has even become much more difficult to afford basic life necessities. Walk on the street and you hear people saying so much about how life has become really difficult and how they can barely get past each day successfully. The level of hunger is increasing greatly, and the number of school dropouts and joblessness is significantly on the rise too.
Some people ask questions about how one can beat inflation, and based on my little knowledge, I would say it is impossible to beat inflation. I mean, this is not just about you, it is an economic factor. The only thing you can do is manage your finances as best as you can against inflation. Make adjustments where necessary and manage your expectations against inflation.
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One of the best ways to handle your finances during inflation is through budgeting. Some people do not like to hear about budgeting, because according to them, it limits their lifestyle. But budgeting can be friendly too, as a matter of fact, it is an excellent spot to begin managing your financial expectations against inflation.
Budgeting helps you to manage and measure income against expenses. When inflation is on the rise, expenses tend to grow faster than income and one of these things is expected to help manage this new reality.
- To decrease your expenses.
- To reallocate income against expenses.
- Increase income.
After budgeting, it is also important that you track your expenses, that is understand exactly where your money is going. With budgeting, you are highlighting areas where you would like your money to go, but with tracking, you are getting involved with reality, understanding exactly where your money is going into. When you combine budgeting with tracking, you have gotten a combined effective power.
Tracking your expenses is very important because those little things you would consider an oversight easily would be accounted for consistently. FOr instance, a cup of coffee daily that may cost $1 that you consider insignificant would add up at the end of the month to cost $30 which now appears to be a significant sum (probably), so it is necessary to know exactly where your money is going into.
During inflation, you must significantly pay attention to differentiating between your needs and your wants. Things are getting more expensive, and your income may no longer be able to get you the lifestyle you lived before now. Your needs are things you can do without, those things that are required for survival, speaking as food, clothes, shelter, and transportation.
On the other hand, we have the pursuit of not-so-significant items as wants. Without getting your wants, you will be just fine, unlike your needs. For some people, they can conveniently afford both their needs and wants without stress, where the problem comes in, is when one is unable to afford those wants and decides to get them on credit. A budget also helps you outline what you need versus what you want.
Posted Using InLeo Alpha