How To Navigate Rising Prices
In economics, Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living. Inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year (IMF)
It can also be described as a general progressive increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. In simple terms it means more money chasing fewer goods. Inflation is a bummer for fixed-income earners, especially pensioners. They are experiencing real budgetary pressures as prices keep rising. The cost of living for the seniors keeps rising while income remains the same.
The rising prices are not about more money chasing fewer goods, instead, it is propelled by the costs of production of goods fueled by the Russian war, the pandemic, and truncated supply chains. There is also a 30% chance of a financial downturn as inflation deepens globally.
To navigate these difficult times that are hitting pocketbooks directly, it is time to re-evaluate spending patterns and lifestyle habits. As we struggle to make ends meet it becomes imperative to rebuild budgets and track spending patterns.
- Curtailing Waste: Place a freeze on purchasing any food items until you do an audit on your fridge, freezers, and pantries. It will surprise you how much can be saved by focusing inwards instead of shopping for food items. Strive to be more accurate in the preparation of meals to avoid leftovers that end in the garbage. Develop a meal plan that will streamline impulse cooking.
- Energy Consumption: With the astronomical cost of diesel and petrol, energy consumption is a big chunk of the spending bill, especially with the regular power outages. Reduce appliances that may be consuming a lot of energy. Downsize your fridges and freezers if you have multiple appliances. Begin to transition to renewable energy and start to seriously think about solar energy for basic energy provision. The upfront cost may be high yet the long-term impact on your pocketbook will be substantial. Think through your lifestyle and intentionally prune it. Small adjustments can result in huge savings.
- Travel: The positive side of the pandemic is the WFH phenomenon ( Work From Home). Now is the time to use remote working where possible to save on travel costs. Carpooling is also an option for travel to and from work. Travel only when it is absolutely necessary. For celebrations and events during this period, it is recommended that you show up only if you will be visibly missed.
- Discounts: Use as many discounts that are available to you. These days every discount counts. There are various associations and cooperatives that provide discounts and benefits on medical essentials and foodstuff. If you are over 50 years old, join NARP50plus to explore options available to enjoy seniority benefits.
These austere times will eventually pass but the tenacity to adapt and prevail will be to your benefit eventually. Remember that rising prices are a global trend, don’t get unnecessarily frustrated. Be proactive and adapt to the realities of the season.
Bunmi Sodade