Financial Wellness: Healthy Money Habits To Observe In the Wake of Inflation
Updated: Oct 4, 2023
To set the record straight, it is possible to live a healthy life with little or no money at all.
But everything costs money these days, from your diet to sessions at the gym, annual medical checkups, and even that well-deserved vacation you finally get a chance to take for relaxation after months of subjecting your mind and body to mountains of stress in the name of making a living!
And with medical inflation currently higher than general inflation, it’s all the more reason to be more careful about your spending appetite, develop a savings culture, and invest wisely!
Here are 5 plus 5 healthy money habits you definitely should observe in the wake of inflation.
Healthy Money Habits to Beat Inflation 1. Create a budget:
This might seem cliché, but you cannot underscore enough the importance of budgeting. It's like providing your money with a GPS to guide its expenditure, saving, and investment paths.
2. Cut down unnecessary expenses:
Keep an eye on your spending habits diligently! For example, spare some thought before buying that pair of shoes that's tempting you or eating out when you can easily cook at home. Inflation means prices will go up, so making sacrifices here and there will help in sustaining financial stability.
3. Diversify income streams:
The realities of today's global economic climate considered, relying solely on a single source of income could lead to financial peril in times of inflation.
It's essential to have multiple streams of income as hedges against inflation and other unforeseen financial consequences.
However, make sure to maintain a positive work-life balance while at it for the sake of your overall well-being.
4. Save smartly:
Setting aside funds for emergencies should become a part of your financial routine amid rising inflation rates — falling into debt is easier when prices are high! Aim to save not just for emergencies but for future investments as well.
5. Invest wisely:
While saving money is great, it doesn't grow on its own - putting it to good use through informed investments could help beat inflation in the long run. Always do your homework before investing in any venture or business.
6. Stay on top of financial trends:
Become financially literate! Understand global economic trends, interest rates, stock market movements, and real estate markets that could potentially affect your money and investments.
7. Live within your means:
This might sound obvious but it is very powerful. Don't succumb to the pressure to keep up with the Joneses, especially during inflation.
8. Plan for retirement:
Even in times of rising costs, planning for retirement cannot be overemphasized. It might seem far away but the sooner you start, the more secure your future becomes!
9. Pay off debts timely:
Debts can compound quickly, especially when we add inflation into the mix— so it's important to prioritize paying them off as soon as possible.
10. Keep a positive attitude:
The economic climate may be shaky but maintaining a positive attitude can motivate you to stick with these healthy money habits even when things become a bit rough.
Remember, long-term financial wellness is not about perfection — it's about making persistent efforts towards these habits each day, and before long, you'll realize just how much progress you've made!
Keeping Up With Medical Inflation
It's hard to talk about financial wellness without touching on personal health… The two are somewhat intertwined.
The term "Medical inflation" refers to the rate at which healthcare costs increase annually, often surpassing the rate of general inflation. This financial phenomenon can heavily impact your ability to access appropriate healthcare and may drain your savings if you’re not adequately prepared for it.
Thankfully, here are a few tips to keep up with rising medical inflation:
Get appropriate health insurance: This helps cushion against high medical costs. It's important to review your coverage periodically to ensure it matches the increasing cost of healthcare needs.
Prioritize preventative care: Preventative health check-ups and services can detect diseases early, potentially saving you from hefty medical expenses down the road.
Keep fit and healthy: From observing a proper diet to exercising, a healthy lifestyle has been proven to reduce the risk of chronic diseases, therefore limiting potential future healthcare costs.
Build an emergency fund: An emergency fund acts as a financial safety net in case of sudden high medical costs or other sudden expenses.
Invest in Medisave or HSAs: In certain countries, healthcare savings accounts like Medisave (Singapore) or Health Savings Accounts (USA) offer tax-saving ways to save specifically for healthcare expenses.
Regularly reassess healthcare costs: Stay informed about increasing prices in prescription drugs, procedures, treatments, etc., and adjust your medical budget accordingly.
Consider telehealth options: Many conditions don't require a physical office visit! Telehealth offers convenience, increased access to care and can help save out-of-pocket costs.
Negotiate medical bills: Believe it or not, medical bills prices are not always set in stone. You can negotiate to pay less or to pay in smaller installments.
Understand your health benefits: If you have a company's health package or government-provided healthcare services, ensure you understand what benefits are available to avoid unnecessary expenses.
Buy generic drugs when possible: Generic medication is typically cheaper than brand-name drugs but has the same effects.
Remember that while rising medical inflation can be intimidating, with the right habits and certain measures in place, it’s entirely possible to manage it effectively without jeopardizing your health or financial wellness.
In Conclusion
And that just about sums it all up. Not all these points might apply directly to you or your current financial situation. But practicing these money habits could easily take your financial well-being up a notch. And definitely, none of them underscores the importance of seeking consultation from a financial advisor when you need one.
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