The newspapers are full of it. The TV channels are showing nothing else. I speak of inflation which is hitting the Indian economy. Here are more details of inflation and what it means. Inflation, in India, reports proclaim is at its highest in the last 13 years!
Earlier estimates that it would stabilize around 7.5 % – 8 % have been tossed out of the window. It looks like inflation has zoomed to be in the region of 11.0 to 11.5 %.
I find from NDTV Profit that pundits predict that It is likely to stay that way for the next few months. One expert said that the earliest things may improve could well be March 2009 – that’s about 10 months away.
How do we brace ourselves to meet the increasing costs and the reduced purchasing power of our rupee? Here are my 7 Steps to Counter Inflation:
- Defer big ticket expenses/luxuries you can do without: The new plasma TV or the latest PDA gizmo can wait.
- Rationalize your investments: Most are presently giving returns less than the rate of inflation. Keep those which will fetch you attractive returns over time ( this to be determined by you considering your needs) and get rid of the ones that you bought on a whim or purely on a speculative basis.
- Hang on to your real estate investments: In inflationary times, costs of construction shoot up making buying new properties more unaffordable than before. The value of your property is likely to stay stable, if nothing else.
- Check your discretionary spending: Can you cut back on the life style you enjoyed when your rupee got you more? Eat out less? See fewer movies at the mutiplex? Spend by all means but remember, a rupee saved is a rupee earned.
- Plan your trips to conserve fuel and cut on fuel costs: Don’t rush here and there in an unplanned manner. Use your car/s by all means but use them sensibly. Don’t return from downtown at 2.00 p.m. only to leave for another place downtown at 4.00 p.m.
- Bargain hard: You need that extra rupee as much as the other guy. Don’t take the easy way out by only seeing the ease and convenience of shopping , as we usually do. Look for where you can get the best price- relatively, of course and within reason. No point driving miles and spending more in the bargain merely to get a lower rate.
- Work on a budget: Everything, but everything is going to cost more. Freight charges and higher input costs make every thing you buy, from food to clothing more expensive. Keep a simple budget for the month. Without breaking your head on every purchase, just make sure that you stay within your defined spending limit.
These are common sense tips. What works for you may not work for the other person. But that shouldn’t stop you from preparing yourself to counter inflation.
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This is Post No: 201 of the “A Step A Day” series : To provide perspective and provoke thought to facilitate self-development across a wide spectrum of issues- big and small- crucial for executive success