Dealing with inflation in an economy can be very frustrating. It is an economical crisis that if not curbed will sink the value of money, rendering people’s savings weak and having people with fixed income especially bear most of the burden. During inflation, the purchasing power of money is said to decline while the prices of commodities continuously increase. As reported by africanews.com,the Nigeria inflation rate rose to 15.70% in February, 2022. So, in case of a continuously fluctuating inflation like we are currently experiencing in Nigeria, it is best to find means to manage ourselves and take our finances off the edge rather than panicking about it. So, let’s take a look at five carefully selected best tips to help you navigate through inflation.
1. Invest
I am placing so much emphasis on investment because it is the perfect move not just to navigate through inflation but to grow your finances as well. You should focus less on savings and more on investment during inflation periods. Real estate is one of the best investments you can have either directly or buying shares of a real estate investment trust. Real estate is known as a real store of value and can help your portfolio in the face of higher inflation. You can also invest in commodities like gold or stock where the companies pass rising prices to customers. As much as you are trying to investment aggressively,it is best to stay away from risky investments.2. Keep your long Term investments
If you already have a portfolio of long term investments, you should do all you can to keep it during this period and not cash it out except for an extreme reason. This is an alternative to the first tip, if you already have a long term investment, you can choose not to make new investments but the best time to cash it out is definitely not during inflation period except for emergency purpose.3. Cut down on your expenditures
Another way to navigate through inflation is definitely to spend less. You should reduce how much money you spend on some goods and services liked unused subscriptions, luxury items atleast for the time being. You can wash your own car instead of going to the car wash, do your laundry instead of hiring a dry cleaner or turn down parties and events that require so much from your pocket. You should also stop impulse buying, defer purchases that are experiencing high hike in prices, maximize loyalty and reward programs at retail stores as well. Lastly, review your budget strictly and stick to it.4. Take Steps towards Earning more Money
With or without inflation, continuously making moves to get higher income or additional money is duly recommended for anyone who is interested in gaining financial independence and freedom . You can ask for a raise at work, get a new job with a better salary, start a profitable business or engage in several other side hustles. The ones who suffer the most during inflation are the people with a fixed income because their earnings remain the same likewise their expenditures but market prices do not remain the same making them spend more with the same income over time. So, it is advisable to do all you can to diversify your streams of income.5. Take new loans in moderation
If you are considering taking on new loans during inflation period, it is not a bad idea but try to do so in moderation and look for loans with fixed interest rate because you never can tell if the inflation wouldn’t get any better. Plus, one of the monetary measures of controlling inflation is high interest rates on loan. So, taking a loan whose interest rate is open to changes might not be beneficial in the long run. However, inflation is a friend of the borrower but an enemy of the lender. But while using this as an advantage, ensure you are doing so only for the right reasons.
In conclusion, when you choose to be intentional about your financial moves during inflation, not only will you survive this crisis but you can also make it beneficial and profitable to your financial portfolio. Take baby steps when necessary and drastic ones if called for, continuously educate yourself financially and then you have all it takes to face all problems standing on your way to financial freedom,inflation inclusive.
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