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How to prevent inflation from ‘eating’ your income?

This year prices are expected to rise by more than 2%. Therefore, the important thing is to know how to make the money enough for the necessary expenses in the home.

During January 2022, a inflation annual rate of 2.56%. This is one of the highest levels in the last seven years, and it has, above all, a direct effect on rising food prices.

Thus, if compared to January 2021, the Basic Family Basket went from $712.11 to $724.39; that is, now a family of four needs $12.28 more per month to be able to buy the necessary products and services.

The inflation, in this sense, means that the dollars in your pocket lose value; or, in other words, that you need more money to buy the same thing from a year ago.

Therefore, faced with the prospect that that inflation do not go below 2% throughout 2022 it is advisable to consider ways to reduce the impact and protect the value of your income and the saving.

1.- If you have money earmarked for savings, at discharge time inflation The least recommended is to leave it in a bank account or in a policy. On average, those two options offer low interest, up to 2%, if the amount is not more than $10,000. So if the inflation projected is greater than 2%, in reality its money will lose value and part of its saving it will vanish

In the current circumstances, the best options are to invest in stocks on the stock market, resort to trust funds, or even look for options in retirement plans. saving for retirement.

2.- Another alternative, much more conventional, to protect the savings is to invest in products that are with rising prices such as gold and other types of minerals. You can also use the cryptocurrencies like bitcoinbut always taking into account that they are medium and long-term investments, that is, large profits cannot be expected immediately.

3.- If you must buy the market of the month with a credit card, do not defer the payment to more than one installment because this would generate higher interest and accumulation of expenses in the following months. As a matter of principle, the expenses of each month are only deferred to a payment installment. In addition, the interest on credit cards is the highest in the market.

4. Be especially careful about everyday or occasional expenses that also inadvertently affect cash flow. It is important that you keep a daily control in a period of crisis.

5. Adjust your budget to the contingencies of each month; In this case, if you increase food expenses, you should see in what area you reduce costs to compensate for this unforeseen event.

6. Make adjustments to the execution of the budget monthly. The master tool to control our expenses should always be the budget.

7.- Go ahead with necessary purchases. A good strategy to deal with inflation it is to anticipate the purchase of goods or products that a family will need in the near future. For example, buying school supplies before the school season starts, or a computer before the peak consumption seasons arrive.

8. Avoid borrowing to cover those consumption expenses in the month because you would only be postponing the problem and also paying interest, which would turn into a snowball.

9. Look for cheaper substitutes, make changes in the diet according to the offer of products and choose those that are more favorable to the pocket.

10. Do not defer expenses from one month to another, therefore it is important, as much as possible, to adjust to the value of the expenses of the month. This situation worsens the situation because negative balances accumulate month after month. (JS)


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