What does inflation mean, really? According to the International Monetary Fund or IMF, inflation refers to the rate of increase in prices over a specific period of time. In this quick guide, we’ll take a look at ways to survive inflation in Philippines and how Filipinos’ standard of living gets affected as inflation continues to rise over the years.
A Glimpse Into How Inflation Looks Like in the Philippines
Before discussing the tips on how to survive inflation in the Philippines and in general, it’s best to be familiar with the major impacts of this rising issue in the country. Here are some of them and their implications:
- Fixed income may be insufficient: For those who are relying on pension benefits to sustain their lifestyle, they may experience that their fixed income may not be enough to account for their needs now that the cost of basic goods and utilities are becoming higher and higher.
- A lifestyle change may be needed: Most especially for average earners, the rising prices of goods mean that they may have to switch to cheaper choices of goods or services they purchase and avail of.
- Healthcare needs may not be prioritized: To meet their daily needs, many Filipinos might be forced to give their health less priority.
- Purchasing power is reduced: Having to spend more for the usual goods and services you’re purchasing may mean lowering your standard of living.
- Capacity to save may be compromised: As you spend more on your basic necessities, you may find that you won’t have enough left in your bank account to allot for your savings.
What You Can Do Today to Manage and Survive Inflation Effects
Looking at the bigger picture, one can only do so much to survive the short- and long-term effects of inflation in the country. However, there are still some things you can do to reduce the negative impact it can have on your living and mitigate the risks involved with it. To better guide you, here are some tips you can start with.
1. Be disciplined enough to prepare.
Many financial experts say that even if the effects of inflation can be managed in the long run so long as people learn to become more disciplined, the rising prices on basic necessities may continue to go on for a bit longer. As the demand for these goods keeps on growing, inflation can also remain a threat to the people’s standard of living.
Hence, you should never underestimate the power of preparation as early as you can. Even if we’re already in the middle of fast-growing inflation, we can still take the time to sort things out now. Take simple actions such as setting and following your budget strictly as well as knowing how to prioritize where you spend your money. The compounding effects of these actions will ultimately contribute to improving your long-term habits and letting you adjust better on how to deal with the rising prices of your necessities.
2. Plan your spending.
It goes without saying that your spending habits in a situation where inflation continues to grow must be more mindful and intentional. Having a budget and sticking to it has always been one of the most common financial tips ever given, but it can’t be stressed enough more during this time.
Your budgeting during financial crises may have to adjust drastically to help you sustain your basic, day-to-day needs. This means you’ll tend to spend more on basic goods, set aside less for your savings, and cut down on other expenses you’re normally having before the inflation. What’s important, though, is that during your budgeting, you must take the initiative to account for certain adjustments you might have to make in paying for your bills and purchasing basic needs such as food. This is because the prices may increase again just after a short period of time.
3. Be wise in where you’re keeping your money.
These days, being strategic on choosing where to keep or save money also helps people to maximize the potential of their savings. As part of your personal financial planning, make sure to research on banks, investments, and ventures you can look into so that you can expect high returns on your hard-earned savings. This way, you’re likely to earn extra passive income that you can use to help you meet your daily needs despite the rise in prices.
4. Don’t be afraid to try other income sources.
More and more Filipinos are becoming open to exploring side hustles. As our needs and wants continue to evolve as time passes by, the costs that come with them aren’t going down. Apart from having a full-time job or business, you can try having part-time work or discovering other business ideas as well for additional streams of income.
Also, you may consider investing in various financial vehicles that may offer high returns and thus help you beat the inflation rate. Since this tactic is a bit technical and complicated for some, seeking expert help from financial advisors is your best option. Like with all things that are fairly new to you, learn to research and ask around for help so that you won’t waste your time and money doing things the wrong way.
5. Zoom in on the things you can control.
Again, this tip is something that’s commonly encouraged by financial experts most especially on how to survive inflation. While advising people to consume less may sound and seem more challenging, proactively encouraging them to control the factors that they have power over seems to be a more favorable action.
To be able to do more toward surviving inflation, consumers have a higher chance of managing the effects by “labeling” their finances as either needs or wants. This way, they’ll know where to focus on and further sort things out on what to prioritize and otherwise. Besides, spending less on things that may be sacrificed for now can help bring more fruitful results in the long run.
To conclude, personal financial planning is key to preparing for and surviving inflation. While there are still a handful of factors that you don’t have power over, you can always put your focus on those that you can work on.
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