The Philippines reported a jump of 0.9 percentage points in its inflation rate for 2022.

This plunge in the inflation rate will certainly have a direct impact on people’s finances and an indirect impact on their lifestyles, including those of their family members.

Financial education and financial independence are the two key factors that can dictate how one can rise above the sky-rocketing prices and evolving economic landscape. 

With much concern around inflation, people are curious to know how to prepare properly and strategically for what’s to come.

For this week’s blog, we bring comprehensive insights to help you deal with its effects.

What is inflation?

According to The New York Times:

“Inflation is a loss of purchasing power over time: It means your dollar will not go as far tomorrow as it did today.

Inflation is typically expressed as the annual change in prices for a basket of goods and services.”

Post Pandemic Effect

According to recent reports, 2022 exceeded the government’s target inflation rate between 2-4% by 0.9 percentage points, i.e. 4.9% 

The major contributors behind it were:

  • Rising oil prices
  • Rising electricity prices
  • meat and fisheries

This statistic is a reminder for you to educate yourselves financially and to plan out a practical solution to be prepared for the uncertainties of life.

Financial Scenarios in the Philippines

COVID 19, a worldwide event that no one could have predicted, called for much more financial preparedness. Reports suggested,” In the first quarter of 2022, the Debt-to-Gross Domestic Product (GDP) ratio was 63.5%. This rate is supposed to be the highest as compared to 2005 which was at 60% 

To cover swelling debts, the Department of Finance (DOF) suggested higher taxes plus a 3-year deferral of income tax reductions that will be introduced. 
These reports prompted us to rethink the way we manage our finances. 

Solutions to Cope with Inflation in the Philippines

Your savings play a crucial role in dealing with life’s unexpected situations – inflation included. So the answer lies in how you are able to augment your savings. Here are some ways:-

Track your expenses
Some people fear looking at what they spend knowing they’ll get a wake-up call with regard to the unnecessary things they allocate money for. It shouldn’t be the case. Tracking your expenses plays a crucial role in managing your money. If you don’t know where your salary goes, you won’t know what areas you can improve on.

An expense tracker gives you an idea of where you frequently spend your money. It can help you trace where it’s going so you can cut down on those costs. There are expense tracking apps which can make it ten times easier for you. 

Have a savings plan in place
Once you have tracked your expenses, the next step is to plan your savings. You can keep a monthly target according to your needs. For example, you can plan that 20% of your monthly salary can go directly to your savings. In case you have an emergency, you can increase your saving percentage for that month. Learn how to prioritize so you can save smartly. Have you set aside money for your kids’ tuition fees? Have you paid all your bills? Do you have enough money for a rainy day? By doing a proper evaluation, you can map out your needs and save accordingly. 

Set aside money for investment
Investing is a great way to grow your money as long as you’ve done proper research. Putting money in stocks, mutual funds, cryptocurrencies, etc. is a good way to make your money work for you. It is advisable to start with a small amount so you can test the waters and explore what investment instrument you’re comfortable with. 

While these are important practices, there is a way to earn money in sustainable ways. SAVii (formerly Uploan), your reliable Salary Finance Platform, believes that investment in education is a long term saving. It prepares you to face the thick and thin of life confidently. What’s better when you are the resource yourself. With the right knowledge, you will succeed no matter what. 

Here are top suggestions from our side to leverage the opportunities out there:-

        • Enroll for free certification courses. There are ample online programs.
        • Work on your technical skills/hard skills.
        • Get your higher education to attract more opportunities.
        • Attend financial literacy webinars to keep up with ongoing trends.

Budget properly

Budgeting is an intersection of all the points listed above. You must know your financial goals. Based on that, you may smartly chalk out your savings and expenses. So budgeting is a crucial practice to face situations like inflation. Here are a few budgeting apps to monitor your financial health:

      • Spending Tracker – It is a Personal Finance App where you can plan your budget. It is simple to use and is free of cost. So give it a try buddy.
      • Goodbudget – Formerly EEBA, the Easy Envelope Budget Aid, Goodbudget is a financial planning application allowing you to budget easy virtually.
      • Money Lover – This is yet again a simple app to keep a track of your budget, daily finances and a lot more. It is convenient to use. You also need not install the app. Sounds like your thing? Try today. 
      • Bobby – It is a subscription-based app which allows you to get insights into your fixed course.
      • Microsoft Excel – This is a common tool which most of you may be aware of. Microsoft Excel is a great way to manage your data. You can manage your budget easily with the spreadsheet.

Choose a reliable financial assistance provider

If you need financial assistance, make sure to choose a trustworthy provider. There are many services in the market. Financial matters are not only about money. They include your mental health, peace of mind, and overall well-being. 

This means that you have to get assistance from a company that offers a holistic approach that can help out in your finances and other important aspects of your life. At SAVii, we offer affordable, reliable, and convenient financial solutions to assist you in times of need.

We also offer free financial education webinars and mental health webinars that can come in handy for your health, education, and development.

Inflation impacts our lives in numerous ways. However, with the right financial education and planning, you can face challenges more confidently. We hope that these insights can help you with whatever uncertainties you may deal with.

We’ll catch you next week for more information that can help you become better. Stay safe and healthy, buddy!