How to tackle inflation in 2023 when you are in a low paying job (Part 1)
2023 is a time of uncertainty and rising prices across Europe and the entire world for that matter. From Paris to Munich, to USA governments are scrambling to implement measures to combat inflation. But is this enough? After all, waiting on government action can be frustrating and feel like an eternity. Whether it's a financial plan in France or increasing interest rates in Bavaria, inflation is a big issue. What can you do to help ease the strain on your wallet?
Outsmarting inflation is not an easy ride. As an economic phenomenon, it's unstoppable. One way to beat inflation is to try to increase your income by asking for a raise or finding other ways to boost your earnings, but in challenging economic times, employers may not be willing to pay out more. Think outside the box and find ways to keep your finances ahead of inflation!
Battling inflation requires strategy and creativity. You can't stop the economic dynamic, but you can find ways to outsmart it. Try asking for a pay rise or focus on increasing your earning power. You could also look for other methods to boost your income, enabling you to better cope with the rising cost of living. Of course, in tough times, companies may not be willing to grant more salary - but that doesn't mean you can't find other ways to outmaneuver the rising cost.
Protecting Your Money Against Price Increases
An alternative approach to battling rising inflation is to hedge against it. For those who are not financially inclined, a hedge consists of making daily life adjustments with the aim of mitigating unfavorable price fluctuations. Saving money when inflation is high and interest rates are low means the purchasing power of those funds is gradually diminishing. If you are in a low paid income it’s also almost impossible to save money.
What’s your best bet?
Struggling with a lower salary and inflation rates? It can be hard to even make ends meet, let alone progress toward your aspirations. In such a situation, even just surviving can be a challenge.
Are you ready to take control of your finances?
Whether you're earning a little or a lot, I'm here to help you budget your money and make your paycheck stretch even further. Join me as I walk you through how to budget with a low income and provide you with some money-saving tips! Hint I am budgeting since 2013 that makes it 10 years in a row and our family income when we started was 780 Euros (pathetic uh?)
Even if you have a limited income, you can still plan your finances. It's all about making the most of what you have. A budget aids you in this task by guiding your money each month.
So, how do you set up a budget when you don't have a lot of money? The same as everyone else: step by step.
Step 1: Calculate your income and list it.
When building a budget, it's essential to start with your income. Knowing how much money is coming in each month is essential to knowing how much you're able to spend. Write down all the sources of income you have, including salaried work, part-time work, side hustles, stipends, child support, disability payments, and social security. If you're paid on commission or have an irregular income, use your lowest monthly income to start with, and you can always increase it from there. Make your budgeting journey more exciting with this easy-to-follow guide!
Step 2: Dig deep and list your expenses
Once you have your total earnings determined, your next move is to plan for all of your monthly outlays. (This is when you'll use your bank account to get a better grasp of your spending.)
IMPORTANT NOTICE: Don’t skip to list everything you spend money on…no matter how small the amount is….
Doing that is going to give you a very clear picture where your hard earned money are going each month… For example if you buy a coffee every morning going to work list that expense…If you have some social obligations to attend and you need to buy gifts list that also…If you have to purchase pet food list that too …you get the idea.
Step 3: Start with the Basics
Before you can allocate resources for the items you want, you must ensure the fundamentals are covered. After setting aside funds for giving and saving, begin by budgeting for your basic needs which is food, paying for utilities, a roof over your head and transportation.
Write down the amount you need for your rent or mortgage, as well as a typical for bills like electricity and water. How much do you usually spend on food each month? What about gas? Don't worry about trying to get your budget percentages exactly right. Just provide your best estimate.
Once your basic needs are taken care of, it's time to look at those items that are not fundamental necessities. How much do you spend on Netflix for example? And what about those Supermarket sagas for household products?
With your budget in hand, you can start to add up some extras when you had covered your basic needs and have the peace of mind that you and your loved ones are having a bed to sleep, a warm house, phone and a car for commuting.
Are you looking for an exceptional budgeting tool? Check out my full Annual Budget that will help you to get everything down in paper and track your progress.
In my next article I am going to share some cool tips of how you can beat inflation and the rising cost of living. Stay tuned