Nigeria’s headline inflation has been accelerating for eight consecutive months, with prices of goods and services making rapid climbs.
September’s inflation rate hit 20.7, the highest in 17 years, according to the National Bureau of Statistics.
In a period of high inflation, the prices of goods go up, meaning you spend more for less or the same quantity of goods. Generally, the cost of living during this period is higher amid limited funds.
To tame inflation, the Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) three times this year to tackle the rising inflation figures.
But despite this, prices have continued on an upward trajectory.
Experts at Axa Mansard, an insurance firm, curated the following steps to live through an inflation period.
Evaluate your spending habits
Try to evaluate your overall spending habits, as much as it depends on you. There could be unnecessary trips and subscriptions that need to be cancelled, among other things. Prioritizing your spending is essential.
Adjust and re-adjust your budget
Adjust and readjust your budget. This primarily includes recurring expenses such as money spent on food, transportation, and utilities, among other things. A revised budget would help an honest assessment of what is required versus what is earned.
Avoid impulse buying
High inflation period is not the best time to make impulsive buying or buy items that may not be in demand. This is due to the fact that often, when we buy things on impulse, we are simply moved by our emotions at the time or because we think it’s a good deal, but we don’t stop to ask if we really need those items. It is always best to wait a day or two before making purchases outside your budget, to give you considerable time to analyze the need for the item.
Buy your food items in bulk
It is best to buy in bulk to save money later. When you buy food in small quantities to meet immediate needs, you end up spending more in the long run compared to when you buy in bulk. In the latter, you’re saving yourself from the future increment in the prices of food.
Read also: Food inflation surges despite drop in global commodity prices
Invest your money
Inflationary periods are ideal for investing rather than saving. This is not the go-ahead to invest without due diligence. Rather, look for investments that are genuine and you understand what you are investing in, more importantly, choose investments that will increase in value with inflation. Saving money will only decrease your purchasing power as inflation reduces its value.
Also, there are certain investment tools that perform well during inflationary seasons.
Invest in yourself
Invest in yourself, this includes taking up upskill courses, professional. upskill courses, professional aiding your self-development goals, this increases your value and what you can offer, equally increasing what comes in as income.
Have multiple sources of income
During inflation times, it is necessary to have other sources of income which could include returns on investment, monetizing a skill, or selling items you no longer use.
Evaluate your decisions
During this time, avoid making any drastic or rash decisions. Whether it is an investment decision, a meal decision, a savings plan, or anything else, it is critical that you consult with relevant parties before making a decision.
