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Despite the year-high MAS Core inflation rate of 5.5% in 2023, it is projected to slow to an average of 2.5-3.5%. Consumer Price Index- All Items Inflation is expected to average between 3.0-4.0%. That said, inflation is still affecting food and energy prices, resulting in diminished purchasing power.
Our friends at Pacific Prime CXA Singapore are here to provide us with valuable tips to protect ourselves amidst intense inflationary pressure.
4 tips to cope with inflation
1. Shop Smart and Reduce Unnecessary Spend
Expenses could be categorised into fixed expenses and discretionary expenses. The latter are expenses that are not 100% necessary which can be reduced by:
- Reviewing subscriptions that are not in use (gym membership, online streaming services)
- Reducing the frequency of the expenses
- Switching to a more budget-friendly option
It is also possible to reduce fixed expenses by shopping smarter. Here are some life hacks you might start incorporating into your daily routine:
- Buy house brand products at supermarkets
- Visit shops and supermarkets near closing time for discounts
- Consider buying from second-hand shops
- Use credit/debit cards that give you better rewards for your spending pattern
2. Make Your Savings Inflation Proof and Start Investing
Outside emergency cash, the rest of your savings can be used to save in higher-interest accounts. Beyond savings, you can also start investing in low-risk instruments like Singapore Saving Bonds and money market funds.
Although investment naturally comes with higher risks, it is one of the best ways to make passive income, increase the purchasing power of your money, and fulfill your financial goals.
3. Actively Increase Your Income
There are many ways to earn extra income besides your main job to relieve the pressure from the increased cost of living.
Consider exploring various sources of side income, from tutoring and using your car for private hire to selling unwanted items and making money from a hobby such as baking or handicrafts.
4. Secure Comprehensive Health Insurance
In this post-COVID era, a significant surge in healthcare costs and demand is noticeable. It is best to re-budget and review your health insurance plan with a reputable broker like Pacific Prime CXA Singapore. Contact them today for a free quote!
For more information about how inflation shapes the health insurance industry, download their State of Health Insurance Report 2023 today!
