Earlier this year, the world has become hopeful as we start to get out of the COVID-19 pandemic after two years. Loosening up of restrictions lead to increased mobility, while still controlling the virus through continuous strict implementation of health protocols.
More sectors started opening up. From opening the borders to more tourists to the resumption of face to face classes, the economy was bouncing up from the lockdowns everywhere in the world.
However, the economic revival slowed down when the prices of basic goods and services started to shoot up. In July, the Philippines’ inflation rate spiked to 6.4%, the fastest in four years.
Weakening purchasing power
An average person may not experience the immediate effects of inflation. The gradual rise in prices of commodities may just surprise you that your usual budget could buy you less groceries than usual.
Prior to the impact of inflation, my humble P2000 weekly budget was exactly what I needed for the food of a family of three. To make it fit, we only bought goods at the local market. Fresh fish, meat, vegetables and fruits were much more affordable there than in the supermarket.
Eventually, our usual budget almost wouldn’t last a week. To stretch it, we had to downgrade our already simple meals. On tighter days, fried egg saves the day.
After all, a Philippine Statistics Authority data showed that P18 is enough for a person’s meal – which probably consists of a cup of rice, and egg – sunny side up, scrambled or hard-boiled, you pick.
Live within your means
Unfortunately, the daily P537 of a minimum wage earner in the capital city weakens. Live within your means, they say. With the inevitable rise of commodity prices, the best we can do is put this into practice.
You can start with tracking all your expenses. ALL. That way, you know where every peso goes. You do this manually, or use an app so you can immediately record on your smartphone every purchase.
Identify which are your needs, and your wants. There might be a leaking bucket you haven’t noticed yet. If you spot some unnecessary purchases, that could have gone to your necessities.
Budget your money. The 50/30/20 principle has been a popular and effective way to manage your finances. You allot 50% of your income for your needs, 30% for your wants and 20% for your savings. However, you can customize this to your lifestyle and income. To make it easier, I advise you use savings calculator. It is a very useful tool to quickly find out how much money you’ll have saved, especially if you still plan on investing despite the tight budget you have.
When you’ve set aside your savings, you also have the option to grow your money to somehow keep up with the inflation. You may choose to invest it in stocks, or cryptocurrency. These have become accessible for many through smartphone apps. You may also consider digital banking platforms that offer higher interest rates on savings accounts than in traditional banks. Also, use savings goal calculator to help you easily figure your finances.
Know when to loosen up
Tightening your spending and saving can become stressful so know when to loosen up. However, leisure is also as important as your necessities so you can have the stamina to survive the days to come. It’s also an act of celebrating your small wins to motivate yourself to keep moving forward.
Having fun doesn’t need to be luxurious. There are many low-cost ways, if not free, to enjoy. Here are some ideas:
Enjoy solitude in your cozy balcony with a warm cup of coffee
Take a stroll outside and appreciate your surroundings
Dive into depths of your favorite book
Netflix-and-chill movie date at the comfort of your home
Pump up the music and jam
Go on thrift-shopping to famous local ukay-ukay shop