Secret Financial Strategies To Beat The Cost Of Living Crisis
Inflation and the cost of living crisis do not seem to be going away. Here are secret financial strategies to help you beat the cost of living crisis!
The cost of living crisis remains. Inflation has not gone away. The cost of housing and groceries is not decreasing. These are secret financial states to help you beat the cost of living crisis!
Live Below Your Means
Stop Keeping Up With Others
Keeping up with others leads to lifestyle inflation. It results in living beyond one’s means. There are many ways that society tells you to keep up with the Kardashians:
Stop comparing yourself to others and receiving validation from people. It is easy to succumb to the pressure to want to follow the crowd. The majority is most often wrong. Instead, invest in yourself and work to reach your goals.
From a young age, people are encouraged to go into debt by going to college, leasing a new car, and getting a mortgage on a big house. Society teaches people from a young age to get their self-worth from things and fancy degrees instead of from oneself.
Focus inward. There is less pressure to keep up with others. Work to improve your situation. Learn to be smart with your money. Use money as a tool to help you reach goals.
Save On Housing
Temporarily move back in with parents or roommates. This can help to get you back on your feet. The money to pay rent can go into building up your savings. Even if you split the rent with friends, it will cost less than spending it all yourself.
Downsize your apartment or house. Live in a smaller home. A modest house most likely worked fine for your grandparents and great-grandparents. There is no reason to have a McMansion if you will not use the extra space.
Decrease the amount of electricity used each day. Turn off any lights that are not in use. Be conscious of the amount of utilities that are used every day. Limit the use to when they are needed.
Keep the blinds closed to insulate the house during cold winter days. Opening the blinds on sunny winter days helps keep heat inside your home. It is a simple strategy to use to save on your electrical bill.
If you plan to purchase a house, shop for the lowest mortgage rate. Different rates can be found online. Compare rates with local banks and lenders in your area.
Reduce Transportation Costs
Be strategic in your work, shopping, and events routes. Plan to take the shortest route.
Learn basic car maintenance skills. You do not need to be a mechanic to know how to replace the windshield wiper fluid and other simple tasks.
Walk, bike, or take public transportation where you live. Public transport is most often found in metropolitan areas. Walking and biking are other options in smaller towns and regions to save money on gas. If you travel a short distance or do not need to put something in a car, bike or walk. Walking and biking also is exercise!
Save On Food
There is nothing wrong with purchasing the store brands. Sometimes, they can be as good as the name brand. It will save money that can be directed to continue to build up your savings or deposited in an investment.
Processed and prepared food from the store’s deli and frozen section can be expensive. It is especially true once the cost is compared to cooking the same dish yourself.
The best way to save money is to cook. Make simple dishes. You do not need to become a chef. Cook the food that you like to eat.
Purchase cheaper cuts of meat. To save money, buy protein that is less expensive than you can afford. The less tender meat cuts require more time to cook or a marinade.
Follow a weekly food budget. Know how much you spend each week on groceries. Include this in your budget. Keep track of grocery spending on an app or your favorite budgeting tool.
Save On Everyday Expenses
Living below your means that you can save at the end of every month. It can be challenging to do this with raging inflation, a cost of living crisis, and the gig economy. Find ways to cut costs as much as possible. It may do things you do not want to, like moving back in with your parents or having roommates. Reduce your costs as close to zero. Pay for necessities. To build an emergency fund, put the extra money into a high-yield savings account.
Follow a budget. There are different budgeting strategies. Two of the most common are the 50/30/20 budget and the 60/30/10 budget. A basic budget is broken down into needs, wants, and saving/investing.
The first part of the budget goes towards necessities: housing, food, transportation, utilities, healthcare/insurance, and insurance.
The second part goes toward any wants. It could be entertainment to invest in self-education. A percentage of this could go to developing new skills to continue to improve oneself. Wants do not necessarily have to be possessions or needlessly spending money.
The final part of the budget goes towards saving and investments. Invest twenty percent of your monthly income. Direct a portion of each paycheck to a high-interest saving account. Once you have built an emergency fund, invest in assets.
Increase Your Income
Invest In Assets
Once you have saved enough money in a savings account, it can be directed toward assets. There are many types of assets. There are risk on and risk off assets.
Risk on assets include:
Stocks
High-yield bonds
Real estate
Currencies and cryptocurrencies
Commodities
Growth and technology stocks
Risk off assets include:
Government bonds
Corporate bonds
U.S. dollar, Swiss Franc, and Japanse Yen
Cash and cash equivalents
Precious metals (gold, silver, and platinum)
Utility stocks
It is vital to build a diversified portfolio. There are specific sectors that may do well one year while another sector does poorly.
Look To Make Passive Income
Discover ways to make passive income. There are many ways to make passive income. Some ideas to make passive income are:
Write a book
Sell a digital course
Sell merch
Advertising revenue on a website or social media platform
Rent out a room on Airbnb or become a landlord
Invest in dividend paying stocks
Passive income requires more work to create a product or service to sell. Once the product is finished, it can bring in extra money every month.
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Summary
The cost of living crisis is here to stay for the moment. Living below your means while working to find ways to increase your income can help you navigate the cost of living crisis.
Become A Secure Single.
What are other strategies to navigate the cost of living crisis? Let us know in the comments below!
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