Inflation is a harsh reality that affects us all in one way or another. In Nigeria, it has become even more of a pressing issue in recent times, with prices of food, fuel, and services skyrocketing at an alarming rate. In March 2024, the headline inflation rate increased to 33.20% which is 11.6% higher than when it was measured on March 2023. The impact is felt across all sectors, from the bustling markets of Lagos to the quiet streets of rural villages.
In this period of price hikes and economic instability, here is what you can do to cope with the current situation in Nigeria:
1. Budget wisely
The first step to coping with inflation is creating a budget and sticking to it. With prices on the rise, it’s more important than ever to plan your expenses carefully. This means making a list of your necessary expenses and cutting back on non-essential items. For instance, you might need to prioritize staple foods like rice and beans over more expensive imported goods. Consider using budgeting apps or the traditional envelope system to allocate funds for different expenses. Remember, every naira counts in these trying times.
2. Shop around for the best deals
When prices are on the rise, it’s crucial to shop around for the best deals. Don’t settle for the first price you see on an item; take the time to compare prices from different vendors. You may be surprised at the price differences you can find. This might mean visiting multiple markets or spending time online comparing prices. For example, buying vegetables from local markets instead of supermarkets could save you a significant amount. Also, consider buying in bulk for non-perishable items when you find good deals.
3. Invest to protect the value of your money
If you’re looking for a way to protect your money from inflation, consider your options for safe investments in Nigeria, like BRAVEWOOD, for example. Investment products are less likely to be affected by inflation and can provide a steady source of income. Invest in government bonds, fixed deposits, and mutual funds. These options can help your money grow at a rate that potentially outpaces inflation. For instance, if inflation is at 15% and your investment yields 18%, you’re still coming out ahead.
4. Consider starting a side hustle:
With prices rising, it can be challenging to make ends meet on a single income. Consider starting a side hustle to bring in some extra cash. This could be anything from freelancing to selling goods online. Many Nigerians have found success in dropshipping, social media management, or even tutoring. The gig economy is booming, and platforms like Fiverr or Upwork can connect you with clients globally. Remember, every extra naira earned is a buffer against rising prices.
5. Cut back on unnecessary expenses
Inflation is a good time to re-evaluate your spending habits. Cut back on unnecessary expenses such as eating out, buying luxury items, and subscriptions you don’t need. This will help you save more money and stretch your budget further. For example, instead of buying lunch at work every day, consider meal prepping at home. If you have multiple streaming subscriptions, consider keeping only your favorite one. Small changes can add up to significant savings over time.
6. Look for ways to increase your income
One of the most effective ways to cope with inflation in Nigeria is to increase your income. Look for ways to earn more money, such as asking for a raise at work, starting a business, or taking on extra work. If you’re in a position to negotiate a salary increase, present your case with clear examples of your value to the company. If starting a business, consider low-capital options like dropshipping or service-based businesses that leverage your existing skills.
7. Save for the rainy day
Inflation can be unpredictable, and it’s always best to be prepared for the worst. Make sure you have an emergency fund that can cover your expenses for at least three months. This will give you some peace of mind in case of any unforeseen circumstances. Start small if you need to – even setting aside 5% of your income can add up over time. Consider opening a separate savings account for this purpose to reduce the temptation to dip into these funds.
8. Embrace local alternatives
With the rising cost of imported goods, now is the time to explore and embrace local alternatives. From food to clothing and even entertainment, there are often cheaper local options that are just as good, if not better. For instance, locally-produced rice is often cheaper than imported varieties and supports Nigerian farmers. Similarly, patronizing local tailors instead of buying imported clothes can save you money while supporting local craftspeople.
9. Invest in yourself
In times of inflation, one of the best investments you can make is in yourself. Upskilling or reskilling can increase your value in the job market, potentially leading to better-paying opportunities. Consider taking online courses, attending workshops, or pursuing certifications in your field. The skills you gain could be your ticket to a higher-paying job or more lucrative side hustle.
10. Practice smart energy consumption
With the rising cost of fuel and electricity, being energy-efficient can lead to significant savings. Use energy-saving bulbs, unplug appliances when not in use, and consider investing in solar power for your home if possible. These initial investments can lead to substantial savings in the long run.
Final Thoughts
In conclusion, coping with inflation in Nigeria can be challenging, but it’s not impossible. By budgeting wisely, shopping around for the best deals, investing, starting a side hustle, cutting back on unnecessary expenses, increasing your income, saving for a rainy day, embracing local alternatives, investing in yourself, and practicing smart energy consumption, you can weather the storm and come out on top. Remember, small changes in your financial habits can lead to significant results over time.
Investing with BRAVEWOOD is a great way to protect the value of your money. With our safe investment products, you can enjoy daily compound interest and safely grow your funds without fear of losing value. In these uncertain times, having a reliable investment partner can make all the difference in securing your financial future.
Bravewood is licensed by the Central Bank of Nigeria to provide investments with low risk and high returns for Nigerian professionals.
