Make household budget inflation-resistant

YOU’VE probably heard about it lately. The inflation rate in the country has been going up. Even if you don’t follow the

WHAT IS INFLATION? HOW DOES IT AFFECT YOU?

prices of basic goods and services are increasing. It decreases the purchasing power of peso.

pay higher for anything you buy.

If you don’t manage household budget well and ahead of time, price spikes can quickly drain your income. Below are tips

prices go up:

1. AVOID LIFESTYLE INFLATION

Got a raise or a higher-paying job? That doesn’t mean your

It can be tempting to upgrade your lifestyle and raise your household spending with your increased income. You may afford it now but the recent price hikes will ruin your budget over time.

Live below your means. Whether you’re earning a high income or not, it’s still better to keep a frugal lifestyle.

2. KEEP A TIGHT BUDGET Everyone in the household must stick to a budget that clearly

on spending for each area (e.g., food, groceries, entertainment, fuel, etc.).

While the household budget should be rigid in terms of allocation for savings, investments, and debt payments, it can be flexible for other spending categories. Adjusting the amount to spend for certain categories is especially necessary when prices increase.

Prices of food and utilities, in particular, have increased following the TRAIN law implementation. Adjust household budget either by allotting more funds for these expenses or controlling the cost. The right choice depends on whether the income can cover these basic necessities or not.

If you opt to cut the costs of feeding your family, there’s a need to carefully plan food budget, daily menu, grocery shopping, and cooking. The Food and Nutrition Research Institute has helpful tips on this.

A group effort in the family to lower water and electricity bills will keep utility expenses at a minimum.

3. ELIMINATE AVOIDABLE EXPENSES

Review the budget and see which expenses can be avoided or cut down. Do you drive your car to work every day? Consider carpooling to trim down fuel costs. Does your family often consume soda and alcohol? Time to slow down on these beverages.

There are many other ways a family can save money when prices keep on rising. For example, if the budget has no room for a travel or watch a movie in malls every weekend, plan a staycation like a movie marathon or a game night. It’s a lot cheaper family bonding activity.

4. MAKE A CONTINGENCY PLAN

Because of the price hikes, it’s easier to exhaust income to cover all household expenses rather than set aside money for contingencies.

Keep building an emergency fund no matter what happens so that when prices of goods continue to increase, your budget won’t be much affected. Aim to save 10% of your total budget for family emergency fund. You’ll definitely need it for the bad times.

5. TRACK EXPENSES AGAINST CURRENT PRICES

Setting a family budget isn’t enough. Monitoring it regularly will help you stay on track.

Know how much money is coming in and going out. Compile and check all the billing statements, bank statements, receipts, payslips, and other income documents. If, for instance, spending is way too much on gas, plan to reduce fuel expenses right away.

an excuse to forego investments. More investments are infact needed because it will help beat

- nent part of household budget. FINAL THOUGHTS

on sticking to household budget. Always keep priorities in mind. This way, one can keep the fam

- spite the price increases.