How to Deal With Inflation? Here Are 6 Things to Cope With It!

Rising inflation is affecting everyone's monthly budget. Isn't it? Here are some practical ways to cope with rising inflation. 

Personal to corporate needs are getting affected by inflation. According to government reports, the yearly inflation report for India has increased to 7.41% in September of this year, which was 7% in August. This April, we also noticed the highest level of inflation compared to the last eight years. 

But what does rising inflation mean? Well, now you have to spend a higher monetary value to buy the same amount of things that you could purchase last month or a year before. 

For many months we have been seeing a steady and sluggish increase in inflation, and it has started affecting our day-to-day lifestyle. As a result, we need to reshape our monthly budget and develop a sustainable budget plan to help us deal with inflation.

How to Deal with Rising Inflation?

1. Be a Budget Savvy

Rising prices of goods and services have motivated households to scale back their expenses. The easier way to do this is to use the 50:30:20 rule, meaning you should spend 50% on needs (such as electricity bill payment, house rent, grocery purchase, etc.), 30% on wants (such as having dinner in a restaurant), and 20% of your monthly income in savings. 

Following this budget strategy, you can benefit from your limited earning sources. Saving at least 20% of your income also encourages you to maintain discipline when shopping and avoid unnecessary purchases. 

2. Put Money in Emergency Fund

You can also put some money into an emergency fund to reduce inflation's impact and the chances of borrowing funds from anywhere. This way, you will be able to cut down the interest payment on any loan you may take in a financial emergency, as you will have an emergency fund to cope with such a tough time. 

Opening a dedicated bank account or looking for a secure investment scheme is ideal. However, ensure that your emergency fund can cover at least five to six months of monthly expenses. Also, you should be able to withdraw the required amount from your emergency fund. 

3. Start Investing from Today Onwards

Along with an emergency fund, you also have to invest in other investment options. You can invest in debt, mutual funds, stocks, FDs, or RDs. There are plenty of investment options that you may find easily in your monthly budget. However, keep your investment portfolio diversified to enjoy a higher rate of return at the lowest possible risk level. 

I have already published an article on the best investment options that offer the highest return over time. You can refer to that article to help you select a secure and budget-friendly investment scheme to cope with rising inflation. 

4. Reduce Unnecessary Expenses 

Looking at your bills is the first way to reduce your expenses. You may be paying most of your income in monthly bills such as electricity bills, mobile phone recharge, Netflix subscriptions, etc. Take a look at your expenses and make a list to figure out how you can cut them to reduce them.

Also, try negotiating to get a better deal when you go shopping. For example, if you need life or health insurance, compare various insurance providers, their insurance schemes, and customer service.

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5. Look for Better Deals & Discount Offers

I thought to discuss it separately as it can help you save a month when shopping. Since rising inflation is affecting your budget greatly, it's essential to look for great places to shop and save money. Ideally, you need to look for places like Facebook Marketplace and eCommerce platforms like Amazon to shop at a discounted price and avail cashback and offers as it will help you save extra money. 

However, you must avoid using credit cards as they can put significant debt and affect your personal lifestyle. Additionally, when investing in an investment scheme, try to hold it for some time and utilize it when you need it. 

6. Start Increasing Your Monthly Income

With a limited monthly income, it can be hard to manage your monthly expenses. Also, the unemployment rate is rising due to uncertain economic conditions, and businesses are struggling to hire new employees. So, if you want to cope with such uncertain employment conditions, starting side jobs to make money will be a great idea. 

There are many sites like Fiverr, Upwork, Craigslist, and eBay, where you can find side gigs to earn extra money. Moreover, I have already published a dedicated article on extra ways to make money online, which will be beneficial if you read and use some of those methods. However, consider renting your spare room, unused car, and bike. Furthermore, you can even become a babysitter or dog sitter or find some local job. 

Conclusion

Inflation continues to rise, and the world economy is also witnessing unfavorable market conditions, resulting in an increase in goods and services prices. If you are also willing to deal with rising inflation, it's better to use the techniques mentioned earlier, especially the 50:30:20 rule. These techniques will help you manage your income and expenses wisely to make the most productive use. 

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