Ghana’s annual inflation rate accelerated for the 16th straight month, to 37.2% in September 2022 from 33.9% in August. The high rate of inflation currently being experienced in Ghana means the cost of goods and services is increasing quickly, much faster than wages. Inflation can indeed have a negative impact on quality of life, especially for those with lower incomes who have to struggle daily with the associated increase in transportation, food, sachet-water, etc. I believe there are certain choices – such as developing a personal budget and spending plan so that where you shop, what/where you eat, where you save and the type of savings – which can assist you hedge against effects of high price upsurges. I recommend the following personal survival strategies for managing the high cost of living.
Reassess your Spending Habits
The rising inflation rate has made it difficult for anyone to stay within their budget, as most Ghanaians’ spending habits have changed in response to the high inflation. I have personally adopted more conservative spending habits to survive. I am more cautious about handling my finances, and strictly work with a spending plan. We need to determine expenses we can temporarily do without to ensure the essential needs are covered: like housing, groceries, fuel and utilities. We can reassess the following non-essential expenses: dining out, subscription services, gym memberships, data-usage, etc. Understanding the cost-drivers in our personal lives will be vital during this period.
Increase your Income (start a side-gig)
Finding alternative ways to increase your income will help you survive the high cost of living. Some of the numerous ways to multiply your livelihood include learning a new skill to help you make additional income, and looking for a new or second job. Starting a side-gig is quite interesting, with a critical focus on your personality, skills, interest and availability. As a business coach, I consider a side-gig not only as an opportunity to earn some extra cash; it can be the key to making ends meet, paying-off debt, and saving and investing more – or sometimes breaking from your day-job. I recommend that you need to take a careful look at your previous experience to determine your strongest skills when starting a side-gig.
Develop a Saving habit
I know very well that saving money can be difficult, especially during a period of rising prices and cost of living. Digital payments are making it easier to spend, hence easy to lose track of the small purchases that add up over time. It is crucial, especially during this period, to create a budget and track how much you can save by measuring your living costs against your income. I would advise we change our mindset about by considering it as an essential cost to be put aside monthly. Furthermore, having at least one month’s worth of expenses in your Saving account will help you survive higher costs of living and surprise additional expenses, as well as the regular daily increases in price of goods and services.
Budgeting is Key
Your budget will provide you with an estimation of revenue and expenses over a specified period, and is usually recompiled and re-evaluated periodically. In order to manage your increasing expenses, there is a need to prepare for unpredictable events and avoid going into debt. It is important to note that keeping track of what you earn and spend helps you understand where your money goes and have greater control over your finances.
Spend Less on Fuel and Drive less
There’s a need to plan your daily route and drive less due to the high fuel prices. I advise we track our daily mileage by creating a log notebook. We should also analyse our driving habits by combining errands when possible, as well as explore alternative forms of transportation if available. Taking the shortest routes will also be helpful, as well as shopping online and getting to know and understand what is available in the market before driving out to buy items.
The writer is a Lecturer, University of Professional Studies-Accra
