Rising Prices? How to Manage Your Household Budget Amid High Inflation

The Philippines is battling a huge inflation problem. As of August 2018, the country’s inflation rate stands at 6.4%, which goes beyond the market estimates of 5.9%.  It is also the highest inflation rate recorded since March 2009.

With the increase in inflation, prices of basic goods and services are also soaring. Needless to say, it’s a major challenge that calls for belt-tightening measures in your budget.

 

Here are tips to help you deal with price hikes caused by inflation.

1. Set your priorities and follow your budget.

Despite the inflation, it’s important that you set your priorities straight. Your topmost priority may be to have enough money to spend for your family’s needs. At the same time, you’ll want to include savings in your list of priorities, so you’ll have money to use later on if the economy does not improve.

In line with these priorities, you can follow the 50/30/20 rule in budgeting. This means setting aside 50% of your money for necessities, 30% for leisure activities, and 20% for savings.

2. Cut or lower unnecessary expenses.

Expenses fall into two categories: needs and wants. Needs include goods and services that sustain you in your everyday living, such as food, shelter, clothing, and health care. However, these needs may turn into wants when you start to spend more than what is necessary. So, food as a need becomes a want when you choose food delivery instead of preparing meals at home.

The general rule is for you to pay for your needs first before buying things that are considered wants.

3. Compare your expenses with current prices.

Since inflation causes prices of commodities to rise, you should take time to review the current prices of goods to see how much extra budget you’ll need. From there, you can look into possible areas where you can slash your budget to help you cope better with the rising costs of living.
Since energy prices are going up, you might want to set a limit on your daily electricity consumption. Put your air-conditioner on timer, so it doesn’t run all day or all night long. When it comes to food, some items are priced ridiculously high, so try to find alternatives or buy less of them for now when you shop for groceries. You should also assess how you’ll be able to save on other lifestyle areas, such as your mobile phone usage, cable subscription and internet service, to mention a few.

4. Search for cheaper or free alternatives.

Being resourceful can also help you cope better with inflation. Whatever product or service you’re using, for sure there’s almost always a cheaper alternative to it. You only need to downgrade a little, so you won’t have to pay so much for it.

If you’re used to taking a taxi or TNVS, you might want to try commuting instead, to lessen your transportation expenses. For short distances, try walking. It’s an excellent way to stay fit, too.

Another money-saving technique you can try is to redeem your freebies or rewards from loyalty cards, which are being issued by different department or grocery stores. Keep track of when you can claim any discount you have earned. As you can see, it’s possible for you to save on your daily expenses if you look for alternatives.

5. Increase your income.

Rising costs will be difficult to manage if your income isn’t enough for your expenses. While you cannot control price hikes, what you can control is the amount of money that comes into your bank account.

Many companies are now offering part-time or freelance work, where you can apply and which can help you earn extra income. Many of these freelance projects are home-based and allow you to choose a flexible schedule.

Getting into business is an excellent money-making prospect, too. You can bake goodies or craft items to sell in your neighborhood. You can also promote your business on social media and then request your family and friends to share it in their own network. Many startups started this way until their income became substantial enough for them to expand.

6. Change your lifestyle.

The current inflation period may also be the best time to make a lifestyle check. Even if you take several jobs or start a business to supplement your income, if you don’t practice lifestyle changes, you won’t be able to achieve your budget management goals.

Encourage everyone in your household to live within or below your means as every little contribution can go a long way in stretching your family’s resources. Cutting down on your expenses, eliminating unhealthy food in your diets such as soda and fast food, and postponing your travel plans – all these can be part of your lifestyle revamp.

 

High Inflation? You can survive it!

Inflation affects not only the economy but millions of Filipino families. However, you shouldn’t let it cause a serious strain on your finances. You can still maintain a decent household budget if you follow every money-saving step you know. You can also check out other money solutions, such as Cashalo, which gives financial assistance for your extra cash needs. Cashalo offers affordable online loan in the Philippines. Approval is as short as one day, so you can have ready cash to add to your family budget.