How to Outsmart Rising Prices: 7 Useful Tips for Individuals
Inflation can be a major concern for individuals, as it can erode the value of their savings and make it harder to afford the things they need.
According to the Singapore Central Bank, in 2023, taking into account all factors including the upcoming GST increase, core inflation should be around 3.5–4.5% on average over the year, and CPI-All Items inflation at between 5.5 - 6.5%.
The great news is that there are steps that individuals can take to protect themselves against rising prices and maintain their purchasing power.
In this article, we'll explore five strategies that individuals can use to outsmart inflation and keep their money safe.
From diversifying investments to shopping around for the best prices, these tips can help you stay ahead of rising costs and safeguard your wealth. By being proactive and taking control of your financial situation, you can minimize the impact of inflation and maintain your financial stability.
1.Diversify Investments
As mentioned above, diversifying investments can help to protect your wealth against the erosion of value caused by inflation.
This can be achieved by adding assets like stocks, real estate to a portfolio or owning cash generating businesses, in addition to cash and fixed-income investments.
2. Use inflation-protected savings vehicles
Some savings vehicles, like Singapore Government Securities (SGS) bonds pay a fixed rate of interest and have maturities ranging from 2 to 50 years. While Treasury bills (T-bills) are short-term Singapore Government Securities (SGS) issued at a discount to their face value.
They both offer protection against inflation and is yielding between 3% to 4%. These investments provide a fixed rate of return that will help you to hedge against inflation, so the value of the investment increases along with the cost of living.
3. Shop around for the best prices
Individuals can reduce the impact of inflation by being strategic about their spending. This can involve shopping around for the best prices on goods and services, negotiating for discounts, and looking for sales and coupons.
You can also consider doing bulk purchases for household items for big families to enjoy economies of scale.
4.Increase income
One way to offset the impact of rising prices is to increase one's income.
This can be achieved through things like negotiating for a raise, taking on additional work or starting a side hustle, or investing in education and training to increase productivity which in turn improve your job prospects and earning potential.
5.Cut expenses
Another way to offset the impact of rising prices is to reduce expenses. This can involve things like cutting back on non-essential spending, reducing debt, and finding ways to save on bills and expenses.
6. Cook at home
As inflation is eroding your purchasing power, it can greatly increase your expenses when eating out especially for families with kids. Why not pick up a new skill and learn to cook at home?
You can easily learn from a lot of gurus in YouTube and cook some delicious simple meals in 30 minutes and will not break the bank.
7. Buy 2nd hand Items
If you are not anal about using 2nd hand goods, it is a good way to reduce expenses and you also help to reduce waste on earth which is a win win situation.
Before buying something, head over to carousel to see if you can find 2nd hand goods. If you are lucky, sometimes the condition is close to brand new too.