Inflation can be a pain, especially when you’re starting a family on a budget. Prices for essential goods and services seem to go up every day, making it harder and harder to make ends meet.
Fuel price hikes seem endless as weeks pass by, and watching the news can make you worry more. The inflation rate in the Philippines was recorded at 5.4% last May, an all-time high in three years and a half.
In today’s economy, it’s more important than ever for families to be money smart and strategic with spending, saving, and investing. In this article, we’ll give you some tips on how to fight inflation as a starting family in the Philippines.
Table of Contents
1. Keep track of your spending
2. Make a budget and stick to it
3. Invest in inflation-proof assets
4. Save more money and compare prices of goods
5. Create multiple streams of income
6. Shop around for the best deals
7. Buy in bulk
8. Have an emergency fund
9. Negotiate your salary
10. Keep your debt manageable
Final Thoughts
1. Keep track of your spending
One of the best ways to fight inflation is to keep track of your spending. It may seem daunting, but there are plenty of ways to make it easier. It will help you to see where your money is going, and it can also help you cut back on unnecessary expenses.
You can also use personal finance apps or online tools to track your spending. It’s a great way to get a bird’s-eye view of your finances and see where you can make adjustments.
Finally, ask yourself and your spouse at the end of each day: “Where did our money go?” It gives you a sense of accountability and helps you see where you put your money and if you’re overspending on non-essentials.
2. Make a budget and stick to it
You can avoid overspending and incurring debt when you stick to a budget. There are a few different ways to make a budget, and one method is creating a list of your monthly income and expenses. Once you have this list, start assigning each expense to a specific category, like food, rent, utilities, transportation, etc.
Once you have everything categorized, you can start looking for areas where you can cut back on spending. For example, if you’re spending a lot on eating out, you may want to try cooking at home more often.
Another way to make a budget is to use a budgeting app or software. There are many different options available, so be sure to research to find one that best fits your needs. Whichever method you choose, it is important to make a budget and stick to it.
3. Invest in inflation-proof assets
To fight inflation, it is important to invest in assets that are not susceptible to inflationary pressures. One way to do this is to invest in real estate. Although the price of property can fluctuate in the short-term, over the long-term, it tends to appreciate in value at a rate that outpaces inflation.
Another option is to invest in precious metals such as gold and silver. These commodities have historically been a good hedge against inflation, and they are also very liquid, meaning they can be easily converted into cash if needed.
Finally, another option is to invest in mutual funds and other types of securities designed to perform well in periods of high inflation. By diversifying your portfolio across a number of different asset classes, you can help ensure that your wealth will be protected from the ravages of inflation.
4. Save more money and compare prices of goods
Saving money is always a good idea, but it becomes even more important when inflation is high. When prices are rising, your money doesn’t go as far, so you need to have more of it saved up to cover expenses.
There are a few different ways to save money, but one of the most effective is ensuring you’re getting the best deal on everything you buy. That means you should compare prices before making a purchase, and don’t be afraid to negotiate.
Make a habit of setting a portion of your income and depositing it to a high-yield savings account such as CIMB Bank or Tonik Bank, to name a few.
5. Create multiple streams of income
When prices go up, your income from one source may not be enough to cover your costs. However, if you have multiple sources of income, you can get better weather the storm.
For example, you might have a job that pays a salary, but you could also have a side hustle that brings in extra money. Or, you might have investments that provide passive income. Creating multiple income streams gives you a financial cushion that can help you withstand tough economic times.
You could buy rental properties or invest in stocks and bonds, and these investments can provide ongoing revenue, even when the markets are down. Finally, you could also start a business. This can be a riskier endeavor, but it can also provide the potential for big rewards if done right.
6. Shop around for the best deals
Shopping around for the best deals is important because it can help you save a lot of money. You can take advantage of sales and discounts and stock up on items when they’re on sale. If you have infants and toddlers, you can buy diapers at discounted prices during shopping festival sales like 6.6, 7.7, payday sales, and more.
You can compare prices at different stores, and if you’re using credit cards, you can also use promo codes and vouchers to get discount prices. Wait for items to go on sale before making a purchase. This may require some patience, but it’s worth it if it means you’ll save money in the long run.
Fuel is one of the most expensive commodities, but you can also work your way around for discounts through membership shopping. For example, use your SNR membership card at any participating Unioil station and enjoy up to ₱5.00 discount per liter.
7. Buy in bulk
This can help you save money because you can get discounts on items when you purchase them in larger quantities. Plus, it enables you to avoid going to the store as often, saving you time and money on transportation costs. If you’re ordering groceries online via GrabMart or MetroMart, you’ll save more on delivery fees.
However, bulk buying can be tricky if you’re not careful. You need to ensure that you’re only buying items you know you’ll use within a reasonable amount of time. Otherwise, you risk ending up with expired food or products that you never end up using.
Be sure to compare prices between different stores before bulk buying, as some stores may charge more per unit than others. Bulk buying can be a great way to save money, but it’s important to do it carefully.
8. Have an emergency fund
Inflation can drag your finances, especially if you’re starting out as a family. One way to help fight inflation is to ensure you have an emergency fund. It’s a pot of money that you set aside for unexpected expenses. That way, if something comes up, you don’t have to put it on a credit card and pay interest.
You can use your emergency fund and replenish it when you have the money. Having one is important because it offers a buffer against unexpected expenses. Life is always full of surprises, and it’s good to have some cash set aside if one pops up.
Ideally, you should have an emergency fund worth three to six months of your monthly expenses. So, if you’re entire household’s monthly expenses is ₱60,000, then you should have ₱180,000 or your ultimate goal is ₱360,000 in the bank.
Let’s say your car needs a new transmission. If you have an emergency fund, you can pay for it with cash and not worry about going into debt. Or, let’s say you lose your job. An emergency fund gives you some financial wiggle room while looking for a new job.
9. Negotiate your salary
If you negotiate your salary, you can ensure that you receive the highest possible wage for your skills and experience. A few key things to remember when negotiating your salary:
First, do your research. Knowing the average salary for your position in your area will give you a good starting point for negotiation.
Second, be confident. Believe in your value, and don’t be afraid to ask for what you’re worth. Finally, be prepared to walk away. If you can’t reach an agreement on salary, either you walk away or find another income stream or side hustle.
10. Keep your debt manageable
It’s important to keep your debt manageable for a number of reasons. First, if you have a lot of debt, you’ll have to make higher loan payments, which will eat into your budget and leave less money for other expenses.
Second, high-interest payments can add up over time and cost you more than the original purchase price. Finally, if you miss loan payments or default on your debt, it will damage your credit score, making it harder to borrow money in the future.
So how can you keep your debt manageable? Ensure only to borrow what you need and can afford to repay and try to get a low-interest rate on your loan by shopping around or negotiating with your lender.
Lastly, make regular and timely payments on your debt to avoid damaging your credit score.
Final Thoughts
So, which one should you prioritize? All of them are important, but some will be more important to you than others. It really depends on your unique financial situation. However, we can say with certainty that if you want to get ahead financially, you must start by creating a budget and sticking to it.
From there, make sure you’re investing in inflation-proof assets and saving as much money as possible. Once you have those basics down, focus on increasing your income and finding the best deals out there.
And lastly, make sure you have an emergency fund, so unexpected expenses don’t derail your finances. These are all essential steps to getting your finances in order, and you can start working on each one today.