**: bottom line AKA the point
Inflation is when the price of goods and services go up but your income stays in the same. Luckily, this is the short-term definition. In the long run your income will increase to meet the supply and demand curve and bringing you to the original financial position you were at before.
However, what are you to do until your income increases? There are many answers to these questions and we will discussion them here:
Answer 1: Increase your Income – This can be done multiple ways.
One of the most popular ways to increase your income is to start a side hustle. You can start by clicking here to learn the best way to generate extra income. Another way is to sell things you have not used in a while or plan to get rid of in the future. Lastly, and potentially the easiest, is to ask your employer for a raise!
Answer 2: Invest – Once you analyze your budget you should have money left over, or set aside specifically, for investing. If you were to invest your money today, ideally, you will take out your money in the future when it has increase in value. The idea here is to take out the money when you have been able to keep up with inflation and still make money. For example, saying that inflation rate for the year is at 5%. You would want to have invested money earlier in the year, made sure you made more than 5% in that invest and then taken that money out of the investment. Any earnings over 5% from the investment would be profit that you can use to pay your bills today!
Answer 3: Lower your Expenses – The easiest answer to this question by far. It may sound hard to spend less but you can do it! Take a look at your expenses, I mean really look at them. The extra cup at coffee, the takeout food, all your amazon purchases, etc. Those can all be limited to necessary spending. You will be amazed how much money you spend without thinking about it. One thing I did that helped me was to write down everything I spent money on when I spent it. Yes, I carried around a pad of paper with me to document my expenses. I realize then and there just how much I spent on fast food, clothes, and unnecessary expenses. During inflation it is the most important time to keep a close eye on your expenses and try to limit any unnecessary spending.
Answer 4: Plan Ahead – This may be the hardest part out of all the answers, but it will pay off the most in the end. We are so busy with our day to day lives it may be difficult to look ahead and prepare for the future but you will be glad you did! There is no telling what will happen in the next week, month or year but if you are at least a little prepared it will lessen the blow. Since there is a lot of talk about inflation with the U.S. recently printing a large amount of currency in the last year now is the time to prepare. Follow the steps outlined throughout this blog, reach out if you have questions and do your own research. Your future self will thank you!
** Some of the best ways to prepare for inflation would be increase your income, invest a portion of your income, lower your expense and plan ahead.
Even if you do one or two of these recommendations you will be one step ahead!
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