The Budgetarian’s Guide to Combating Inflation and Preserving Purchasing Power

How inflation squeezes our daily lives

In the Philippines, inflation is a real challenge that affects the daily lives of many. Each time the prices of food and transport rise, families have to stretch their budgets even thinner. That's how inflation makes life tougher for all of us, it squeezes our budgets and tests our diskarte.

A recent survey by Pulse Asia, reported in March 2024, reveals that a staggering 70% of Filipinos see "controlling inflation"—addressing the skyrocketing costs of basic needs—as a crucial issue requiring immediate governmental action.

The Philippine Statistics Authority further underscores the situation, reporting a quickened inflation rate of 3.9% in May , up from February's 3.4%. This climb is largely driven by upticks in food and transportation, with rice inflation notably reaching a 15-year high at 24.4%.

Who’s feeling inflation the most?

While inflation is a shared burden, not everyone feels its weight equally. Families with tighter budgets, those already struggling to make ends meet, are hit the hardest. Think of the nanays and tatays on fixed incomes. Every peso matters to them, and when prices jump, it can feel like being pushed into a corner.

And then there's the younger generation – the fresh grads and early career folks. They’re facing rising living costs right when they’re starting out, making it tough to save, invest, or even just enjoy a little of what they’ve earned at that point in life when they're trying to get ahead.

Ease the inflation pinch the Budgetarian way

But here’s the good news: there are smart ways to fight back and protect your purchasing power. Think of it as the shopper’s strategy game, where planning and wise decisions can help you win.

1. Be wais at budgeting

   It's time to take a hard look at your spending. Prioritize what's essential, then find ways to cut back on the rest. Choose homemade over takeout. Learn to cook, or brew your own coffee. Adjust old expenses that you got used to “just because.” If skipping that extra milk tea buys you something that brings more (or longer lasting) happiness, your wallet will thank you tomorrow.



2. Increase your income

   If you can, finding ways to earn a little on the side can help keep your lifestyle steady even as prices climb. Think freelancing, tutoring, or whatever skill you might turn into income.

3. Shop smart

   Keep an eye out for sales and coupons, and when it makes sense, buy in bulk. Big packs have a higher cash outlay, but cost less per portion you use. If you’re worried about not using eggs, bread, etc., find a grocery buddy to split BOGO deals with. Other times, the brand doesn't matter as much as the price tag, so give generic brands a chance. They could offer you the same quality at a lower price.



4. Save smarter

   Look for saving accounts or options that offer a bit more bang for your buck, in the form of higher interest. Every little bit of extra interest helps fight against inflation's effects.



5. Invest wisely

   While it might sound intimidating, investing could be a way to outpace inflation in the long run. But remember, it’s all about doing your homework or finding a trustworthy financial advisor to guide you.

6. Grow your own food

   There’s no denying our body’s need for leafy greens, but vegetable price spikes could make anyone reconsider. If you’ve got the space, why not revive your plantito/tita days and try growing veggies and herbs?  It’s good for your waist as well as your wallet, and guarantees fresh ingredients for your home cooking. Tomatoes, eggplants and sweet potatoes are easy to grow, and having a malunggay tree in your backyard can give ordinary dishes a nutritious boost.



7. Be energy efficient

   Small changes like LED bulbs or fixing that constantly running toilet can reduce your bills, giving you a bit more breathing room each month.
   
   Electricity and air conditioning bills are literally a hot topic lately. To lower your consumption, set your aircon to 25°C, the Department of Energy-recommended standard. This can give you significant savings, because every degree below 25°C can increase energy consumption up to 8%. You can also set timers, and clean your air conditioner regularly to keep it running at optimum level.

8. Plan your meals

   Impromptu food orders via apps may be convenient but not necessarily cost-efficient. Planning and preparing family meals can save you money. By knowing what you'll serve ahead of time, you avoid last-minute orders that cost more and leave you with leftovers you don’t really want.



9. Save on gas

With fluctuating fuel prices, save on gas expenses by carpooling. This allows you to split the cost of gas and reduce wear and tear on your vehicle. You can also consider alternative modes of transportation like biking, walking, or public transit for shorter trips. The exercise improves your health, too.

10. Avoid new debt

    Steer clear of new loans (and major credit card purchases) until you pay off existing ones. You'll feel lighter and more in control.
    
    

11. Educate yourself

    Understanding the economy and how your personal finances can adapt is a mighty tool. Knowledge really is power.

Inflation can be daunting, but it’s not insurmountable. By adopting some of these strategies, you can protect your hard-earned money and perhaps even find new ways to let it grow.

Another way of tackling inflation is having insurance. Insurance policies, whether for life, health, property, or investments, can shield you from unexpected expenses that might otherwise strain your budget during inflationary periods. By safeguarding your assets and ensuring coverage against unforeseen events, insurance helps maintain stability and allows you to focus on your long-term financial goals.