The world economy is already facing a huge inflationary pressure and Nigeria (my 'adorable' country) is not missing out on this one. Ironically, it seems like we are the hotbed of inflation because ours have been here since antiquity.
The major concern about this inflationary pressure in Nigeria is that it's rapidly getting out of hand. The textbook approach to curbing Inflation is by using monetary policy (by Central Bank) and fiscal policy (by Government). However, we still don't know if any of these schoolboy strategies are making things better or worse.
Ohhh... I was being nice when I said that. The fact is that every attempt to reduce the inflationary pressure usually births more inflationary pressure. I have sufficient data that shows how the world economy is getting f*cked by inflation, but the focus of this post would be limited to Nigeria.
Nigeria's economy is in crisis and inflation is at the epicentre of the microscopic issues we are facing. As far as I can tell, both the Government and Central Bank are running out of ideas to use and curb inflation. Everyone would have to devise a strategy that will help them survive in this era of recurring inflationary pressure.
Some of the suggested ways to cope with inflation are known in principle by many people, but you can only get the details when you put them into practice. That's how you will see what works and what doesn't work. In my case, these are the strategies I adopt in my attempt to cope with inflation;
1. Budgeting can never go wrong.
Assuming you are true to yourself and you recognize the income you earn, drafting and working with a budget will help you be in control of your finances during inflation. In my case, the essence of budgeting is to make sure I won't go on a spending spree especially when I walk into shopping malls.
When drawing my budget, I prioritise things that are very essential to my day-to-day convenience. You know those things we can't do without. Stuff like water, food items, internet subscription, rent, electricity bill, healthcare and family welfare. Since I'm a full-time remote worker, even if inflation drags everyone down to hell, every little penny I get would have to be channelled to these things. So, I put them first when spending. Luxuries can come afterwards, within reason.
2. Being debt-free is the first survival strategy.
Sometimes, it seems like people don't understand how tough it can be to live as a debtor. Even if there is no inflation, being a debtor isn't something to be proud of. Now, imagine being a debtor while inflation is rocking the World economy. How would you survive that?
Expenses are already building up and it's very normal for people to overlook some expenses especially when they are living on a budget. Having debts that need weekly or monthly servicing at a time like this can drag people to insanity. This is why I have it as a personal financial rule to try as much as possible to live a debt-free life.
3. Any leftover money has to be Invested.
I believe we already know what inflation entails. Well, are you also aware that inflation punishes those that have some cash saved up somewhere... A bank, safe or under their mattress. This is how it works; If I manage to save #100,000 in cash and the economy gets rocked by 50% inflation, the #100,000 I have still maintained the same face value, but the real value has subsequently reduced to #50,000.
Do you get the gist? Inflation surely affects everyone, but one of the things I've learned is that it's preferable to invest my cash than to save it up in Bank. Since I'm a Nigerian, even if I decide to invest my cash in foreign currency or HBD, it will still be a wiser long-term decision. Besides, the 20% APR on HBD savings is better than the 5.25% our commercial banks offer here.
Those three things help me to cope with inflation. It's already a habit to live this way and I consider it a way to avoid being ripped apart by the invisible hands of inflation. For the record, more strategies help me cope with inflation, but this would be a good time to get the best bits from y'all.
What else would you add to the list? What helps you cope with inflation?
Thanks For Not Missing Any Full-stop Or Comma
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