What is inflation?
Inflation is a general increase in the prices of goods and services in an economy as defined by Investopedia. Inflation can be caused by printing more money than the country needs, legally devaluing the power of the currency, and a shortage of key goods and services which can help or push prices to rise. Inflation works in three ways: Demand-Pull, which means the demand for products has exceeded production and therefore causes a price hike on products such as demand in Yam tubers which would make farmers increase prices due to lower produce being available and causing people to buy regardless of price. The second way Inflation works is through Cost-Push, through the increase of raw materials for production, main producers would have to increase the prices of products made available for sale too. The third is Built-In, which is mainly a boomerang effect, the rise in prices causes an increase in workers’ wages.
How to beat inflation?
As of August 2023, Nigeria’s inflation rate was reported to be around 25.8% according to the National Bureau of Statistics (NBS) and as of September 2024, Nigeria’s inflation rate has risen to 32.7. Every day we all possibly wake up thinking of how to stay afloat in Nigeria. We wake up to new prices from transportation, food prices, and services we get daily. Here are some ways we can beat inflation. Savings are not the best way to beat inflation, If you save in Naira, knowing how to beat inflation in Nigeria is probably more important because the longer you keep the currency, the more money you lose.
-Learn to invest
-Save on high-interest-rate apps
-Learn budgeting skills
Learn To Invest
I know it’s easy to get skeptical about investments especially if you have been involved in a Ponzi scheme or two but now that we are all wiser, it is time to learn how to properly invest in not just paper but also yourself. During inflation, you are your biggest investment, add more value to yourself, and build on your skills and network. Focus on long-term investments and not get-rich-quick schemes. Learn about funds, bonds, bills, and stocks, and learn how to build foundational wealth that will keep you stable and grounded.
Save On High Interest Rate Apps
If you want to save, probably for emergencies, Find interest-giving apps that can add value to your money and not lose. Save in alternate currencies that have tangible value. Apps like Piggyvest, CowryWise, and Branch will help put interest on your money. However, the advice is always to do your research and be mindful of risks associated with fintech platforms.
“₦100 in 1960 would be valued at ₦567k ($1,332) in 2022, a 566,990% depreciation rate in 62 years.”
Learn Budgeting Skills
On building your skills, learn to budget, Budgeting will help you live below your means and track your expenses. You can build a proper money and spending diet when you build a budget that keeps you disciplined. As Aristotle said; “Through discipline comes freedom.”
Beating inflation in Nigeria requires a proactive and head-on approach. With the rising inflation rate and ongoing economic challenges, it is very important to develop smart financial strategies that will secure your financial future. Build long-term goals for your finances. Stay disciplined and keep your going and growing in the best ways possible.
