What NOT To Cut From Your New High Inflation Budget is quite a difficult decision. The last few years have been stressful on a global scale, to say the least. And while the lock-downs during the height of the COVID-19 pandemic may have led to people saving money (as there were fewer ways to spend it) the period of freedom afterward saw most of us return to spending a little more.
However, with global inflation and rising interests now an increasing problem, people are revisiting their budgets again, wondering what they should cut out this time to make it through this new storm with a relatively healthy bank account.
In doing so, they will come across all kinds of advice about just what they should cut from their budget to save money. Much of the advice is always pretty much the same. Eat out less, cook at home more (which, thanks to COVID-19, had almost become the norm anyway), shop more carefully at the supermarket, cut TV service and entertainment expenses, look for cheaper cell phone service, and so on.
What is addressed less often is What NOT To Cut From Your New High Inflation Budget when the going gets tougher, which, while it may not be the case for you just yet, may very well be on the horizon if things continue as they are right now for an extended period of time (which does seem likely) So what are some of the most important of these things? That’s what we are going to take a closer look at here.
What NOT To Cut From Your New High Inflation Budget
Don’t Cut Money for Savings
Much of the advice you’ll read about budgeting around inflation will involve telling you to reduce the amount of money you spend almost across the board. However, if you manage to do that, you should not neglect to make better use of some of the money you save by doing so by actually saving it in the literal sense of the word.
Unfortunately, when inflation hits lots of people who have managed to get into the habit of saving money for a larger expense – retirement, future kid’s college expenses, a much ‘rainier’ day – stop doing so.
Don’t let that be a decision you make. You should still hold onto your savings goals – or start making some if you have yet to do so – as whatever the interest rate is today, or the current inflation rate, the smart reasons you started saving in the first place still apply and the benefits of doing so are just as valid.
What NOT To Cut From Your New High Inflation Budget
Don’t Cut Making Smart Investments
While it may not be the best time to start ‘playing’ the stock market recklessly, or hedging your bets on something very risky like crypto or NFTs, even in a period of higher global inflation smart investments are still well worth making.
To ensure you have the best chance of getting the best return on those investments, schedule a meeting with a financial advisor who can help guide you towards investments you can afford to make while still sticking to a sensible budget, and introduce you to lesser-known options like offshore investing which you may not have considered before.
What NOT To Cut From Your New High Inflation Budget
Don’t Cut Essential Insurance Coverage
While some expenses make sense to cut at a time when prices are rising, essential insurance coverage is not among them.
Take medical aid for example. The business of medicine might be primarily about helping people, but it is just that, and, just like everyone else, doctors, hospitals, and other medical providers do put their fees and prices up as their expenses rise, so it’s a terrible time to cut something like medical aid out of your budget.
Even if you are very healthy right now, if the past few years have taught us anything, it is that that’s something that can change at any time, and huge medical bills are the last thing anyone needs when they are attempting to make their money go as far as possible.
What NOT To Cut From Your New High Inflation Budget
Don’t Cut Small Simple Pleasures
Since we are all facing a uniquely stressful time, don’t be so quick to cut out all of the things that are making your life more bearable. This is an unprecedented time, a really difficult mental time as well as a financial time. If you can keep a small something that just makes you happy, keep it, whether it’s a monthly night out at your favorite restaurant, your Netflix subscription, or some other small treat.
Ask one of our Financial Planners for smart advice, it may change the way you see your future and your way out of this global increase in costs.
Investing Against Recession in 2022