Budgeting Blues: 3 simple and best ways to beat inflation

Inflation: With the basic commodities prices skyrocketing, it has becoming difficult for one to manage their finances effectively. India's retail inflation in August 2022 rose to 7%, up from 6.71% in July mainly due to high food prices.

Surging prices are affecting the pockets and people are looking for solutions to beat this situation. Here are five ways that will help an individual to stay ahead of inflation:

Cut down on unnecessary expenses 
It is necessary to cut down on expenses that affect one’s pocket negatively, this can only be done by revaluating the expenses and prioritising the needs. Needs are things you use regularly, such as food, groceries, and other necessities for your survival and basic existence. Wants are things you buy for your comfort or luxury - such as going out to dine, home delivery, going to movie theatres, and many others. To beat inflation, one needs to evaluate what is necessary and what can be skipped.

Smart Budgeting 
Budgeting helps one to keep a track of their spending, the 50:30:20 rule ideally allocates 50 per cent of your income to needs, 30 per cent to wants, and 20 per cent to savings and investments. Therefore, following this rule will help one keep track of their expenses and maintain a budget. 

Boost your emergency funds
Emergency funds are backup savings that one relies on when there is an emergency situation. This amount should be saved and kept aside for future needs before investing the money. As inflation surges one should set aside additional funds to manage their expenses i.e. at least 6 months of their expenses which can be quickly and easily available when an emergency strikes.