It is glaring that we are undergoing inflation in Nigeria. The price of everything is constantly on the rise. If you’ve visited the market lately, you would have noticed the prices of commodities or food items are no longer the same.
For example, a pack of spaghetti that used to cost 150 naira is now hovering between 400 and 500 naira. Feeding costs are twice or more than they used to be as of 2019-2020. This has made life quite difficult for Nigerians living from pay cheque to pay cheque.
How do you protect your money from the ever-rising inflation despite this reality?
Inflation is a common occurrence in an economy; however, it can be avoided. No matter where you are in your career, business or retirement, it is easy to become concerned about your assets when there are signs of inflation. However, some economic trends may make the average person restrict their spending. It’s different when you’re concerned about whether the money you’re investing and saving is losing value. So, what are the appropriate actions to safeguard your financial situation?
Cut Down on Expenses
Create a lean budget that cuts down your splurge on unnecessary things. This can also be achieved by buying items in bulk. This helps you save money that can be redirected towards other personal and financial needs. Also, new business ideas that boost your income might arise or side jobs that pay extra.
Invest or Open High-Yielding Savings Account
Low-interest rates from banks have made saving for inflation particularly challenging. While prices are rising on everything you buy, the interest earned on your cash at the bank is practically zero. If you don’t invest, it could lead to a gradual decline in your purchasing power. Therefore, it is better to have a diversified investment portfolio whose value increases with inflation. Ceepas offers a high-yielding savings account that provides interest as high as 12.5%.
Save in Foreign Currencies
Saving in foreign currencies higher in value than the naira is also an alternative to hedging your finances against inflation.
Income From Real Estate
Income from renting a property is called ‘real estate income’. Real estate income is one of the best strategies to hedge an investment portfolio against inflation. As property prices increase in tandem with inflation, landlords can charge a higher rent.
Gold has frequently been regarded as an inflation hedge. While gold doesn’t always provide short-term protection from rising inflation, it usually does so in the long run. In reality, many individuals have considered gold an ‘alternative currency’, especially in nations where the national currency depreciates. These nations frequently use gold or other stable currencies when their currency fails. Since it is a genuine, physical asset, it often retains its worth.
Ceepas is your number one digital banking platform for investments, savings, and loans. Download the app on various app stores to start your journey to financial freedom.