How to Stay Ahead of Rising Cost of Living in 2023

According to a report from the National Bureau of Statistics, the inflation rate in Nigeria increased to 17.71% on a year-on-year basis in May 2022. Now, the inflation rate is at 19.64%. Inflation happens when the general level of prices within an economy increases and leads to a rise in the price of goods and services. As a result of this, the buying power of consumers within that economy decreases because they can only purchase a smaller amount of goods and services at the same price.

Currently, everything is more expensive than it was a year ago—even a few months ago. The prices of goods and services are becoming outrageous causing the overall cost of living to go through the roof. So, how do you stay ahead of this?

This article highlights three major ways to stay ahead of the rising cost of living and to ensure that your finances do not get hurt during this period.

1. Protect your money from inflation

Saving is great for your finances. However, during inflation, it’s not the best decision to rely solely on saving in naira. If you save ₦ 5 million, that amount may be worth less after several months. Instead, grow your money in dollars.

There’s a major difference between saving your money in dollars and putting it in safe dollar-based investments. With investments, you get to grow your money in two ways:

• The value of your money goes higher whenever the exchange rate increases. If you put $1,000 in dollar-based investments at the rate of ₦750, your value increases in Naira if the exchange rate becomes ₦800. 🥳
• You also get to enjoy capital appreciation and paid dividends, all in USD.

Simply put, your money stays protected from inflation. At Cowrywise, we have the best dollar mutual funds for you to grow and protect your money.

2. Focus more on increasing your income

Look at the trend, consumer prices have been on the rise consistently for a while. It’s a sad reality but things may not get cheaper anytime soon. You can’t keep “managing” your funds, hoping for a better country. Also, you can only put the money you have into valuable investments.

Now is the best time to focus on ways to increase your income. How?

• Learn a new skill: It can be a bit dicey learning a new skill because you start to wonder when you will get good at it enough to bring food to your table. But it’s better and brings more assurances than doing nothing. Look for a skill that’s valuable and needed, then start learning. There are a lot of free tools out there and we also curated a guide on how to transition into tech, if that’s something you want.
• Negotiate your pay: Are you a salary earner? Then it may be time to talk to your employer about increasing your pay. Make a proper report on what you have done and why you deserve to be paid more—and show it to the right manager. If you haven’t been doing a lot of valuable work, you should do better. You can check our quick guide on how you can get a raise at your job.
• Sell digital products: Do you have skills you are naturally talented at? Or you’ve mastered your work so well? Then you should consider turning your skills into digital, sellable products. Creating online classes, publishing ebooks, consulting with brands, etc. are ways to quickly turn your skills into digital products that will make you more money. Confused on how to go about it? Let’s teach you how to make money with digital products.

Do whatever you can to increase your income, as increasing your income gives you the power to do more with your money.

3. Spend your money smartly

It doesn’t matter how much you make, this isn’t the right time to spend lavishly or without plans. Companies keep downsizing, people keep losing their jobs and a lot of businesses are experiencing hard times. You don’t want to be in a position where you have no money to fall back on.

Create an actionable budget and work with it.
Pay off your debts first, the consistent rise in inflation will keep making you pay more than you actually owe.
Have an emergency fund so that you don’t fall into panic mode when urgent money needs arise.
Negotiate more and get the best deals possible with vendors. Ensure you’re getting the best value for whatever you’re buying with money.

In summary, as inflation rises, it’s super important to be more proactive with money. If you come by this article, share it with your friend. Be that good Samaritan that’ll help them through this time.

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