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Ways to Protect Yourself From Inflation

17 Jan 2023
Protect yourself against inflation with Gibraltar BSN investment-linked insurance

Have you been noticing the prices of essential items such as food and fuel increasing? Rising inflation, an increase in the prices of goods and services, is affecting Malaysia today. The threat is expected to lower purchasing power for most Malaysians. During uncertain economic times not only in Malaysia but also the world, it’s important to know how to protect ourselves against inflation. Here are 3 effective ways to do so.

Wife tells husband to budget for Gibraltar BSN insurance instead of donuts

Source: Giphy

Revise your budget

Here are three things you need to look out for in your budget during high inflation:

a) Try prioritising paying off debt. It reduces the interest you have to pay which can help when higher prices kick in. Check out our debt payment tips.
b) Based on recent trends, It is common for inflation to be driven by fuel prices. Consider carpooling or taking public transport. If you have the option, opt for work from home.

c) Take the time to review your expenses and cut out the unnecessary ones. For example, expenses such as subscriptions you don’t use (TV, premium music streaming), gym membership (opt for home workouts instead), or daily expensive coffee (make your own).

Sometimes it’s best to start by putting your budget on a sheet of paper. The Quick Start Budget form is an easy and convenient budget template. Just fill in the numbers and start planning for inflation now!  If budgeting feels like a chore, remember, high inflation will not last forever.

Woman should be shopping smarter such as spending on Gibraltar BSN insurance

Source: Tenor

Shop smarter

Groceries are one of the hardest hit areas by inflation. Buy in bulk for items that you will frequently use such as staple food because you can buy more items at a lower per-unit price. Common staple food in Malaysia include rice, noodles, and frozen meat.

Meatless days are gaining popularity with trends such as “Meatless Monday” establishing themselves in many countries around the world. Try embracing meatless days and incorporating food such as beans, whole grains, vegetables, and fruits that can subtract your expenses while at the same time add to a healthier diet.

Make a list before grocery shopping. Waste of groceries is common among Malaysians with the cost to dispose food wasted by each Malaysian household coming to about RM210 a month, or RM2,600 a year.

When shopping smarter, being patient helps. Wait for a bundle or year end sale. For example, when going on a holiday, you can save a lot of money waiting for a budget airline promotion like from AirAsia or attending the MATTA fair. 

Invest for returns that outpace inflation

Invest to get returns on your money at a higher rate than the inflation rate. As prices rise, the purchasing value of your existing cash decreases over time. Put money in stable investments with returns that will beat inflation. A general rule of thumb is that 15% of your pretax income should go towards investments.

Such inflation-beating assets include blue chip stocks, in other words, a stock of a company that has a large market cap, strong reputation, and a long history of sound financial performance. Examples include DiGi, Tenaga Nasional, and Top Glove. An option to beat inflation and financially protect you and your family at the same time would be GoProtect. It is an investment-linked plan that has 4 funds to choose from, tailored to your needs and risk appetite. Real estate is also a popular way to beat inflation since as annual rental income increases, your cost of ownership doesn't. The value of the property also appreciates over time. However, it has unique risks such as buying the wrong property or getting overleveraged. 

By following these tips, you can be well prepared to handle inflation by spending on your necessities first, cutting out expenses, and investing in a way that outpaces inflation. Start your inflation-beating journey today with GoProtect.