Inflation has reached record levels. The goods and services we’re used to purchasing are becoming difficult to afford. In times of financial hardship, it’s important to identify ways in which you can save money. Here are a few ideas to help save money to combat inflation.
Focus on and Longevity and Cost Efficiency
When times are lean and you have to make a purchase, it’s crucial that you find products that are quality and will have some longevity to them. However, while quality products are a priority, you also have to balance that with cost efficiency.
One of the best ways to protect yourself against inflation is to invest in stocks. While growth may be slow during these times, the return on your investment will likely exceed inflation. As the price of goods are rise, stock prices are rise too. If you want to invest, make sure you diversify your portfolio to protect your wealth.
Take Advantage of Low Interest Rates
If you’re on the fence about purchasing a home, take the plunge. Interest rates are incredibly low right now. In some cases, you can get an interest rate of less than 3%. This means you can protect yourself against rising rent prices by locking into a mortgage loan. Now, this doesn’t mean you should overextend yourself by purchasing a home you can’t afford. Make sure you’re living completely within your means.
Stick to your Budget
When money is tight, it’s so important to budget. Start by tracking your expenses. You need to know where every penny of your paycheck is going. Next, create a realistic monthly budget. This is crucial. It takes practice, restraint, sacrifice and a frugal mindset to live within your means on a consistent basis. Be strict about staying within your budget and make adjustments as needed. A budget will help give you peace of mind and allow you to keep achieving your financial goals.
Buy Instead of Rent
Believe it or not, another way to save money during times of inflation is to purchase a home instead of renting. An article written by Gitanjali Poonia for deseret.com elaborates by saying, “During an inflationary period, the market usually favors the buyers over renters, according to Forbes. Landlords usually hike up the rent next to the level of inflation. But if you’re a homeowner, your payments are fixed and the value of your home is likely to rise over time.” Budgeting works best when you know what your monthly expenses are going to be. Buying a home means locking yourself into a payment plan that will not change. You can’t guarantee the same when you rent.
Inflation has touched everything and it’s showing no signs of slowing down. While you can’t prevent costs from rising, you can prepare yourself. When you get your finances in order and work to live within your means, times of inflation won’t feel nearly as stressful.