3 min.
Editorial Invest in Slovakia
Higher prices for food, energy and other current expenses are causing financial problems for many households. Many are wondering how to effectively fight inflation and save at least a few euros a month. The good news is that there are several ways to do this.
Every household should have Definitely Financial reservethat will save her in difficult times. The size of the financial reserve depends on the needs of the family itself. Most experts recommend putting aside 10 % of the total monthly household income.
However, saving in times of inflation may not be so advantageous as money loses its value. That's why it's a good idea to think about, if you don't invest some of itto earn you something or at least make up for the losses. Nowadays, you can invest in a variety of financial instruments and commodities, such as precious metals, shares, funds or real estate.
Borrowing at a time of rising prices may not be so convenient. Banks are increasing interest rates, which reach their maximum for longer fixations. Buying a property or anything else must therefore be well thought out. Consider waiting a while before buying.
But if you have a stable income and urgently need a new home or car, make sure you reduce the risks associated with the loan. Calculate how much your budget can bear and choose a fixing period that is long enough. This will protect you from the possibility that an increase will worsen your economic situation. Interest rates are currently rising all the time.
... in September 2022, mortgages reached with 10-year fixation up to 4.3 %? However, this figure is far from final and will increase as inflation rises. So if you're thinking of taking out a loan, arrange it as soon as possible and fix it for as long as possible.
Another effective solution to fight inflation is increase salary. Some employers increase pay automatically when inflation occurs. If you have a clause in your employment contract about the possibility of a pay rise, meet with your manager and try to find a common solution.
Negotiating a pay rise may not be pleasant. However, it is definitely worth a try.
Price increases are not just for food and energy. It also affects rental prices. If your rental costs are due to increase or have already increased, arrange a meeting with the landlord. See if you can agree on a final amount for your housing and reduce it slightly. Many landlords are happy to reduce the price temporarily for responsible tenants.
Conversely, if you own the rental property, talk to the tenant about the situation. You can try to split the increased utility costs between the two parties.
Again, negotiation is not a very pleasant affair, but it can often lead to to win-win solutions.
It is important to prepare properly for the difficult times that come with price rises and inflation. The key is to know how to save even on current expenses and how to make the most of the money. Ideally invest in areas that are currently doing well. Choose relatively stable assets such as real estate. Invest regularly, even in smaller amounts. In our other articles you will read, how to start investing and not get burntwhether how to choose the right real estate investment project.
