Inflation Is Eating Up Our Income. What Can We Do?

With the inflation rate creeping up higher and higher after the rise of fuel prices in the country, what is the government going to do about it?A bowl of my favourite noodle near my house was RM4.00 before the fuel price increased to RM2.70. Now, the same bowl of noodle is sold at RM4.30. I am sure elsewhere, your favourite hawker food is also sold at a higher price now.Hmm, looks good to be a hawker nowadays. You can just raise your price by 30 sen (7.5%) whenever there is any increase of fuel price. Does your employer give you a raise of 7.5% to your salary?
I bet not.So, how are we going to survive this kind of price increase? This is inflation in the ugliest way. Your RM4.00 can't buy you the same thing again. Expenses keep going up higher while our income (those who work for a fixed salary) remains the same.Is the government asking us to eat less now when they say to be more prudent in our spending? How do we eat less? A bowl of noodle is a bowl of noodle. You have to buy a bowl, you can't buy less than a bowl.Interest rate hike likely in Q3.The Sun paper reported today that interest rate will go up soon and will happen in Q3. How much will it go up to?What good does the interest rate do to us? You can say that the interest rate for Fixed Deposit account will be higher. But will it be higher that the current inflation rate? Bank Negara says June's inflation rate is at 6%. Will we see the interest rate in Fixed Deposit jumps from 3.5% now to over 6%? Definitely not.And even if interest rate jumps up that high, I don't think I have much money to be put away as saving anyway. Look at all the money going to the increasing expenses due to inflation. Where do we have money left for savings?And if interest rates go up, your house mortgage payment will also go up.
That is, if your mortgage is the conventional type that rides with the Base Lending Rate (BLR). Be prepared to face an increased in your monthly payment! This will eat up more of your income. Be ready to discuss with your banker for them to work out something for you. Get them to reduce your interest rate or extend your loan tenure.Time is surely going to be tough now! Everything is going up. But the market is going down. The good news is market is cyclical. Put whatever savings you have into the market. The market will eventually go up again. If you are consistent, over the long term, you will gain. Investment after all is a long term thing.Think about it.