#FinanceFridays: Managing the Rising Cost of Goods (Inflation)
Everywhere we go, the cost of goods is increasing, from our favorite teas and coffees (and I'm talking about buying tea and coffee from the grocery store here, not Starbucks or your favourite take out coffee shops), to gas, to mortgage payments... the cost of goods is ever-increasing. This post will address ways to manage the rising cost of goods through tips and tricks to save and manage what money we do have leftover each day, each week, each month. Here we will discuss the cash-only budget, no spend challenges, and consolidating debt. Here we go!
The Cash-Only Budget
The Cash-Only Budget is just as it sounds. It means putting the credit and debit cards away and sticking cold hard cash for all of our everyday purchases. Wait, why would we do this when we have the convenience of credit and debit cards? Well, sticking to physical cash and coin places a hard stop limit on what we can spend. Instead of having our bank accounts, or credit balances available at our fingertips, cash forces us to be cognizent and aware of how much we are spending and how much we have leftover.
No-Spend Challenges can be a lot of fun. Just as it sounds, the No-Spend Challenge means not spending on unnecessary purchases and sticking to the basics: food, shelter, clothing and some recreation. No-Spend Challenges also force us to be cognizent and aware of our spending to ensure we are not spending on extras and in fact, sticking to the basics.
Consolidating debt may be a solution for some people, where we take out debts and consolidate them into a debt consolidation loan, or in some cases, people refinancing their mortgages. This makes it so that instead of having several credit payments to pay each month, there is only one monthly debt consolidation loan payment to pay. This may be the solution also if the rate received is lower than most, if not, all of the single debts outstanding. For example, a debt consolidation loan may be at a rate of 8% meanwhile your credit card payment may be at 19.99%. This would save you 11.99% each month in savings.
While managing inflation and the rising cost of goods is not easy, with hard work and consistency in our actions and behaviours, there can be an optimal outcome: saving and managing what money we do have leftover each month. If you think of more ways to battle the rising cost of goods, I would love to know in the comments below! Signed, Filipina Budget Girl.