It’s no news that prices of goods and services are constantly on the rise. While you may not be able to control this rise (which we call inflation), you can control the effects it has on your money.
For those who are not familiar with the term inflation, it is a general increase in the prices of goods and services. While your money doesn’t reduce (literally), the purchasing power of your money reduces. For example, if you could buy a set of ten different groceries for #20,000 in 2020, the same #20,000 would not buy those same set of groceries in 2022 because of inflation. You see that your #20,000 is still intact but the purchasing power of your money has gone down.
While the prices of goods and services increase, not everyone also gets an increase in income, and this results to a shortfall.
In today’s post, I would be sharing three practical ways to preserve the purchasing power of your money in the face of inflation.
1. Bulk-Buy Your Non-perishables– One good way to preserve the purchasing power of your money is to stock up your non-perishables in bulk- be it food items, groceries, toiletries and the likes. You can shop for these monthly or bimonthly (if you can afford that). This saves you from experiencing such stories as “I got this item last week for a lesser price, when did it become more expensive?”
2. Bulk-Buy with your friends– Don’t we all have friends? Friendships are for companionship and other reasons; however, we can also leverage on our friendship circles to aid our finances. Another great option you can explore is bulk buying with your friends (foodstuff, groceries, toiletries, etc). This way, you all can get these items at wholesale prices or at cheaper prices and then split the items within you all. You may all decide to dedicate a day to do all your shopping together or whatever works best for you all. In cases like this, the more friends, the better it gets. You may feel the savings on these items may be little to you, but then when you accumulate all these little savings together, it amounts to something.
3. Invest in Products higher than the inflation rate– I can’t preach this enough! One good way to preserve your money is to invest a good part of it, especially in investment products that are higher than the prevailing inflation rate. So, when next you’re about to make an investment, ensure the return on investment is higher than the prevailing interest rate. Also, remember that at least 10% of your monthly income should go towards investment.
I hope you find these three tips very helpful in preserving the purchasing power of your money.
Thank you for reading!
To your financial independence and freedom!
