We all know that inflation is killing our saving. If you compared your last year expenses with your current year expenses, you might be shocked to see the prices of things have increased more than 10%. How are we going to deal with inflation?
First is to continue investing. When inflation is driving the prices up, it does help businesses to get higher revenue. You can see the things now you buy are more expensive and this is how the business revenue is increasing too! Even if we are investing in the real estate, the house price and the rental price will increase in accordance with inflation too. If we are not investing, we are losing the chance of tapping into the higher revenue of business or real estate investment. If we are investing, perhaps we still get the chance to offset the inflation impact.
Second is to cut down expenses. This can be the easiest way to do to deal with inflation for most people. We can start to cut down the expenses on the major items like furniture, car, insurances, etc. These items will have higher chances of saving if we do some price comparison before purchasing them. Other items will be recurring costs like:-
- Utility bills: cut down the usage of air-conditioner, converting the pre-paid telephone plan to fixed post-paid unlimited telephone plan, etc.
- Loan installment: at this low interest environment after pandemic period, it is good chance to review and restructure the loan to see any possibility to get lower interest rate. Those loans that have been taken 10 years above will have higher chance of restructuring to lower interest and hence lower loan installment amount.
- Eating out cost: with the high inflation currently, it is recommended to reduce the frequency of eating out. This can save up to 20%-40% of the eating out cost.
Third is to increase income. There are currently a lot of opportunities available on the internet. For highly skilled professionals, they can get part time job through freelancer.com. Some unskilled executives can also get extra income by driving grab. Operating an e-commerce store seems to be another alternative for youngsters to increase their income too.
Hence, while inflation rate is increasing, we need to consider doing something to deal with the inflation so that our wealth is not affected.
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