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Adjust Your Finances To Offset Inflation

The economy of the country has been unstable in recent times and business managers have attributed it to political instability, devaluation of the currency and the plunging oil prices.
Notable among the factors that have contributed to the high cost of living was the fuel scarcity that caused untold hardship to the poor and wealthy alike.
The demands of oil marketers for subsidy claim arrears owed by the out-gone government almost plunged the country into comatose with individuals and businesses spending a higher percentage of their income on fuel.
The impact of the fuel scarcity which was sold for an average of N300 per litre in the previous month have not abated as the high cost of doing business has affected the price of essential commodities.
As a result, the resultant inflation is having a negative effect on financial goals and plans that had been set by individuals, families and businesses.
Experts note that most times whenever there is an increase in the cost of basic commodities, the high price persists and fails to decline. They have also observed that inflation, which affects purchasing power, is not often accompanied by increase in wages.
As result, the act of cutting down on expenses in order to meet up with obligations and stay out of debt is often canvassed by financial advisers.
Nigeria’s Consumer Price Index increased from 8.7 per cent in April to 9.0 per cent in May, year on year, according to the National Bureau of Statistics and to protect your finances from inflation, financial analysts advise that the following precautionary steps should be taken.
Adjust your lifestyle
There have been regular complaints concerning the inability of people to meet financial obligations due to sudden rise in the cost of basic necessities, especially food.
As a result, families and businesses have succumbed to borrowing and accruing huge debt.
However, experts say that cutting down on expenses and avoiding purchases based on cravings can help in managing finances.
According to a financial expert, Mr. Femi Adedokun, people who live above their means may go bankrupt in an environment where there is inflation.
“Plan your meals within a budget. When shopping, avoid buying on impulse. Explore high grade second hand shops, garage sales, especially in classy neighbourhoods because they offer good bargains. Substitute higher priced foods with low cost ones. Limit the amount you spend on leisure and entertainment and spend more on necessities,” he says.
Monitor inflation reports
In preparation for further rise in the cost of essential household and business items, business advisers say people should monitor inflation reports released monthly by the National Bureau of Statistics.
This report, according to Adedokun, will give insight into the affected commodities so that appropriate adjustment can be made in the financial plans of individuals, families and businesses.
Observe return on investments
A decline may arise in the profits from investments. However, financial analysts advise that business investors can check how each fund invested has performed and whether its risk rating or yield has changed.
Buy items in bulk
Experts say many of the items purchased in mass reduce expenses because per unit cost is much cheaper. According to them, when this is done, immediate need of these household items is guaranteed and the remaining unused ones can be kept in the store until needed.
They add that some items are easier to stock than others and issues of how much storage space is available and their perishability have to be considered.
Citing CPI report, Adedokun says that the prices of food items such as yam, potatoes, fruits, meats, fish, oils and fats groups have increased. He says these items can be purchased in bulk because there is a possibility that the prices will remain high in subsequent months.
He says perishable foods like meat, fish, vegetables and fruit can also be bought in bulk and preserved by traditional methods or frozen to prevent spoilage.
Find alternatives
On the other hand, the analyst suggests that the alternatives to products with the inflated price can be purchased.
Citing meat and fish as examples, Adedokun says alternatives to costly fish and meat can be egg, while other vegetables and fruits which are in season and tend to be less expensive can be purchased in exchange with the costly ones.
Similarly, to guard against unforeseen circumstances, other investment opportunities can be explored. According towww.inflationarytimes.com, investment advisers can assist in making decision on assets like:
Foreign currencies
Experts say some people may decide to transfer the bulk of their inflating currency into other relatively stable currencies as a hedge against inflation. That may work up to a point, but as worldwide inflation picks up, because the world uses the United States dollar as its reserve currency, all fiat currencies may lose value.
Precious metals and coins
Other people hoard hard assets, especially precious metals. On the other hand, experts say people may not want to store precious metals in their house or safety deposit box. Instead, they suggest that investors should consider purchasing a warehouse receipt or certificate of ownership from an entity that stores the metals.
Mutual funds
Professionals note that there are different ways (vehicles or instruments) to purchase precious metals, as well as other commodities. There are the securities markets, where interested investors can purchase stock in a mutual fund that holds the physical gold and silver. Other mutual funds may invest in anything from mining companies or other natural resource companies to blue-chip stocks, commodities, or foreign businesses.

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