What is inflation?
Inflation is a phenomenon that occurs throughout a country's economy. It is observed where monetary transactions take place. Looking at the economy in general, we can see that prices are constantly changing - some are rising, while others are falling. Inflation is said to occur when all prices drastically rise, not just selected ones, not just periodically. Inflation is primarily due to the printing of money - with the same amount of money as before, we can buy far fewer products needed in our daily lives. So, how to combat inflation?
1. Create a budget
First of all, you need to think about how to fight inflation at home. At the point when 'every penny' starts to count for us, the most important thing is of course to optimize expenditure, and therefore it is best to set a certain budget. Although spending wisely will not make inflation any less of an issue, it will help to avoid more serious financial problems. For example, a good way to set a balanced budget is the 50/30/20 rule. This is a very simple method of organizing your spending - divide your income into three parts.
50% of your income should be spent on essential expenses, here bills, transport (petrol, tickets), food, cleaning products and any loan installments or repayments. 30% is the amount for expenses just for you, such as going out, clothes shopping, going to restaurants and so on. 20%, on the other hand, is the amount to be saved - the money saved can be used for investments, big goals such as a car or flat, or even to pay off loans more quickly. The aim of this method is, above all, to stop living "from paycheck to paycheck", so for a time of strong inflation, it is as advisable as possible.
2. Try investing
If you have spare funds that you would like to replicate in some way, you should certainly try your hand at investing. Although at first glance it seems difficult and very dangerous, you should not be discouraged, but try to explore the subject and learn as much as possible - for example by acknowledging our other article about investing for beginners. Investing is not only a good way to fight inflation, but also is an opportunity for long-term earnings that may come in handy in the distant, or even near future.
3. Look for an additional job
A good idea to fight inflation, if of course your living conditions allow it, would be to find additional work. A few extra pennies a month can significantly improve your standard of living in an era of increased prices. Try looking for casual jobs in your area - perhaps someone is looking for a babysitter, dog sitter or a help with an elderly person, perhaps someone is looking for help with house cleaning or the local shop is short of staff at weekends?
However, if there is a shortage of such offers, or if you simply find it hard to combine your existing life with your next job, it is worth looking for a job online, for which often the only requirement is to have an internet-connecting device and the internet itself. You can find such work on Paidwork, for example. This site offers to earn money for performing very simple tasks such as watching adverts, completing surveys or playing games in exchange for points that can be exchanged for money. It can also be downloaded on mobile devices with App Store and GooglePlay, which makes making money even easier and very convenient.
4. Pay off your debts
If you have loans, credits, leases or other sources taking a certain amount of money from you every month, inflation will be much harder on you. As prices in the markets rise, interest rates on loans tend to rise, which significantly affects people who are paying them off over the long term. In such a situation, it is best to go to a financial adviser. A specialized person will help you decide what repayment plan to take, and you can even transfer your loan to another bank that is more cost-effective for you with their help. Fighting inflation will be much easier with lower repayment of the loan, won’t it?
5. Don’t let inflation scare you
This may not be straightforward advice on how to combat inflation, but awareness itself is also very important. Inflation is a temporary condition. The prices caused by it will decrease in some time and the market situation will stabilize again. Try not to obsessively focus on the money fight, because 'hard times' will always come and go, and we can’t really do nothing about it. Don’t stress out too much, you can do it!