Even though I got a C in Economics, I know that inflation essentially means a general increase in prices and fall in the purchasing value of money.
But no one needs to study Economics to feel the effects of inflation in our everyday lives one way or another.
If that plate of cai fan is costing you 50 cents to a dollar more today compared to six months ago, even as your stomach is not any fuller, that’s an effect of inflation.
And if you want a macro explanation, here’s one.
Due to global instability, inflation might be around longer than we think.
Core inflation rose 5.3 per cent in September, with a 0.5 per cent increase on a month to month basis.
Global instability contributes to this, as supply constraints will further push prices up.
In addition, from Dec. 26, transport fares will increase by 4 to 5 cents.
In the long run, such seemingly single-digit numbers add up.
Fret not, though.
Here are five practical tips to cope with the rising costs:
1. Use the 50/30/20 rule for budgeting
The 50/30/20 rule is a good way to budget your income into three separate categories: Needs, wants and savings or debt.
It originates from the 2005 book, “All Your Worth: The Ultimate Lifetime Money Plan”, written by current U.S. Senator Elizabeth Warren and her daughter, Amelia Warren Tyagi.
Essentially, 50 per cent of your monthly income will be put aside for essentials, such as groceries, transport fare and monthly rent.
Next, 30 per cent of your income can go to purchasing items you want or are saving up to, maybe a new iPhone 14, or a holiday to Japan?
And lastly, 20 per cent of your income can go to a savings account, or can be used to pay off loans or debt.
This method creates a more sustainable way of spending, providing you with a better idea of where your money is going.
Coupled with a detailed spreadsheet, this method gives you a goal, and ensures that you keep all your accounts in check.
Now that’s what I call responsible adulting.
2. Rethink your ‘luxuries’
‘Luxuries’ can have many definitions to many people.
Maybe it’s treating yourself to the largest size of your favourite drink at the end of the week, because hey, you deserve it for making it.
Or maybe it’s that fancy new camera that you’ve wanted for the longest time.
Or maybe, it’s both those things.
It’s easy to spend on little “luxuries” throughout the week — or day, I’m not judging — but if you have big saving goals, it might be best to cut down on small spendings to save up for the bigger picture.
Think about it, by resisting the urge to buy one cup or coffee to work, or a bubble tea on the way home, you can easily save around S$5 to S$10 a day.
It comes with the added benefit of being healthier, since your body probably doesn’t need that much sugar anyway.
Soon, you’ll be able to buy that camera in no time.
Alternatively, you can opt for travelling on public transport instead of taking private hire vehicles.
Personally, I find myself spending way too much money just because I was too lazy to get out of bed earlier.
After a tiring day at work, it can be all too easy to just call for a taxi home.
But at the end of the day, the only thing that will be crying is my wallet.
So, try to limit your rides to three to four times a month, and only when you really need it.
It’s shocking how much you can save when you cut down on these small expenses…
3. Thrift shopping to satisfy your shopaholic self
Being nice to the environment can also mean being nice to your wallet.
Thrifting is cool now.
Pre-loved clothes can be well-loved clothes.
In addition to reducing fabric waste, you might be able to find designer and high-quality pieces at affordable prices.
It’s a good way to curate a one-of-a-kind wardrobe without spending too much.
Shopping for staple pieces and coordinating your wardrobe can help you save some money too, compared to buying outfit-specific clothing that will rarely be worn.
This reduces the clutter in your wardrobe, and you’ll find yourself buying less clothing in general.
Or maybe you can just avoid walking into shops altogether. That works too.
4. Track your purchases
Now, I know it’s hard to look at your bank account.
But the easiest way to ensure that you do not make excessive purchases, simultaneously making sure that you are hitting your saving goals, is to track your purchases.
This can be done through readily available budgeting apps.
Most banks have some sort of financial planning and tracking service. If not, there are a multitude of apps on the App Store, or even a simple Google sheet will work just fine.
Just make sure to diligently update your spending habits onto the app.
The app will categorise your spendings so that you can see where your money goes at one glance.
This is the easiest way to see if you need to cut down on certain kinds of spending, like on food, transport, games and others..
In addition, you should probably cut out unnecessary spending and subscriptions.
Have subscriptions such as gym memberships and wellness packages that are under-utilised? Unsubscribe now, and you can save a little more.
Micromanaging your spending may seem like a chore, but for those who can’t afford to spend freely, it’s necessary to make every dollar count.
5. Find cheaper alternatives and good deals
It’s not hard to keep track of the latest deals around you.
One place to look for deals is the Price Kaki app, a price comparison platform that provides price transparency for daily essential and cooked food.
It uses your location to sniff out good deals in your area, so that you can make informed decisions.
By adding things you regularly buy to “my shopping list”, you can turn on notifications to receive alerts to keep track of price fluctuations.
Recently, Price Kaki has partnered with Food and Beverage (F&B) group Koufu to list food and beverages sold at 71 of their coffee shops and food courts.
Overall, Price Kaki has over 300 coffee shops and food courts listed on the app, and has been downloaded over 120,000 times by users who are looking to stretch their dollars.
Price Khaki predominantly focuses on comparing prices of daily essentials and cooked food.
Saving a couple of cents on one product might seem insignificant, but if you buy a whole basket of groceries, the savings tally up.
Simply type in the item you are looking for, and a dozen options will pop up. You can then compare prices across different brands, and choose the one that fits your budget.
Price Kaki also monitors price changes of commodities, and will instantly send you a notification, so you’ll know if items in your shopping list have become cheaper or more expensive.
Participating supermarkets include NTUC FairPrice, Sheng Siong, Giant, Prime Supermarket, as well as online grocery store Redmart.
All in all, these are some of the ways you can spend wisely, save a buck or two, and work towards a financial goal.
You can download Price Kaki on IPhone, Android and Huawei.
Top photo from Ruth Chai
This article is sponsored by Consumers Association of Singapore (CASE), and motivates the writer to stretch her dollar.