ISEGHE AJAYI
With the cost of commodities skyrocketing with each passing day due to high inflation, survival has become a colossal task for everyone regardless of social status.
The unpleasant situation has also continued to have a negative multiplier effect on the standard of living of the masses such that their purchasing power has lost its worth, depreciating more and can no longer give them that value for items procured.
The best way to fight and overcome this virus called, inflation, is to work on your financial mindset positively by increasing your income streams as depending on a single source of income is no longer sustainable.
More so, the value of the Naira has depreciated massively, particularly when compared with foreign currencies such as Dollars, Pounds Sterling, and Euros. And this has truly affected the business and economic environment adversely such that the money kept in the bank for savings has become valueless, if not invested wisely.
That is why it is important you try as much as possible to adjust your financial life style, spend your money prudently and focus on those things or items that are essential to avoid regrets.
What Inflation Does To Your Finances
Inflation is a killer of our finances as well as investments and has no respect for anybody’s financial status. It fuels the constant rise in the prices of goods and services which certainly brings down the purchasing power of individuals over-time.
It is quite true that reaching financial set goals during inflation can be very hard because inflation moves sneakily and slowly. Besides, it can take decades to have a significant upshot on your financial goals, making it the silent killer of your finances.
It is important to plan for it because when you relate inflation to your earnings and expenses, you will certainly want your money to grow at least as hastily as inflation does to avoid financial heartache. Do you know that if your money does not keep up with inflation, it will be quite difficult to cover your daily rising expenses? That is why it is critical you try as much as possible to guard yourself from inflation because if unplanned, you will in the long run discover that you did not save or invest and to avoid the blame game, you need to defeat it by prioritising your needs.
The under-listed tips will help you to handle inflation in this unfavourable economy:
Purchase Essential Items
If you desire to handle inflation, there is need to cut out the wants and patronise items that you cannot do without to reduce cost. If your budget is the busy one that entails all household items, it will do you good to streamline it to accommodate savings. Slash items that are not essential to avoid waste.
Do Bulk Buying
It will do you good to buy food items in bulk to lessen costs and save extra money.
It is very true that with retail buying, you tend to spend more but if you want to see the worth of your hard-earned money in these terrible hard times, do bulk buying especially in food items and at markets where they sell in wholesale.
Adhere To Your Spending Plan
One way to protect yourself against rising inflation is not in the area of investment but in your expenses.
The big risk of inflation is that the money you spend every month is always on the increase and there is nothing you can do about it, other than going back to your drawing board or spending plan if you truly desire to survive the situation.
Endeavour to stick to your spending plan so as not to overshoot your budget. Besides, you can also eliminate expenses that are not expedient to accommodate savings.
Locally Made Goods Patronise
Several people regardless of their social status have a penchant for foreign items whose prices have continued to rise beyond the reach of many due to increases in foreign exchange and import duties.
Despite that, some individuals are not ready to let go of this habit and are ready to go to the extent of borrowing money to purchase foreign items. Rather than living a lifestyle of debts or make-belief, why not go for locally produced items that can still meet your needs particularly if you do not have the wherewithal? Do you know that to surmount inflation, you must be prepared to amend your lifestyle especially if you crave financial freedom?
Be Truthful To Yourself
One way of beating inflation is to be truthful to yourself by not impressing people. If your rent is on the high side and paying it as and when due is becoming hard for you, there is no big deal in relocating to a place where the rent is affordable.
Better still, you can go for a moderate apartment that is within your means in your preferred location to reduce cost.
Education
Owing to the rise in the cost of commodities, nearly all schools especially privately owned schools have increased their fees arbitrarily all in the name of providing ‘quality education.’
But, if you are one of those badly hit by inflation and as such, finding it difficult to cope with your children’s school fees, why not change their school since you can still get qualitative education for them in a cheaper school and at the same location?
Sell Disposable Items
Why keep items that have value for money that you can afford not to use? Since survival for several people is quite demanding owing to the unpalatable state of the economy, it is pertinent to increase your sources of income to survive. For example, if you have several cars and suffer a job loss or your business is nose-diving, there is nothing wrong in disposing of some of your cars to get money to resuscitate your business. You can also use them for Uber business to enhance your financial life.
Lease Your House
If you live in a big house, a duplex, or a bungalow, and your earnings are adversely affected by inflation, why not partition the apartment and rent the remaining part to make money and reduce your financial hassle?
Besides, real estate is a lucrative and appreciable business even with inflation.
Save In Foreign Currencies
The simplest and safest way to keep your money free from inflation is to hold it in a legal tender that is not as prone to inflation as the Naira.
If the CBN chooses to dump its pegged exchange rate system for a floating exchange, the worth of the Naira will better reveal the inflation rate.
Currencies such as the Dollar, Euro, and pound sterling have done better than the Naira because they are backed by stronger economies.
The most common way to keep or save foreign currency is to open a domiciliary account in a Nigerian bank but the process can be quite tiresome and you will have to pay monthly maintenance charges on the account.
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