Month: April 2016

How to Adjust Your Financial Plan for Inflation

 

Inflation is the overall nationwide price rise of certain essential commodities which we use every day, and the major two factors that influence inflation is the supply and demand for these essential commodities. If the supply meets demand its neutral, and if supply is in excess over demand then there will be a dip in inflation, however people have been witnessing only an increase in demand for most of the times and so inflation keeps increasing every year. So, it is good to assume an inflation rise and planning the finance accordingly.

The best way to tackle inflation is divestment of savings into different investment options whereby the risk of loss gets lower and the rate of interest in return should be greater than the inflation cost to be met. Also, ensure that your investment option shall proportionately reflect inflation rise and shall yield a rate of return accordingly. And another way is to look for alternative products that may cost less for each primary commodity that comes under inflation.