How to deal with cost of living increase?


Do you find that making a living has become harder? Most people have found this to be the case.

Paychecks do not buy as much as they used to. Housewives observe that nearly everything in the stores costs more.

The root of the problem is inflation—that is, constantly rising prices. That has been the pattern for many decades now.

 The rate of inflation worldwide was higher than ever before. Because of inflation, it takes more and more of your money to buy the same things.

What is especially troublesome is that every year prices usually rise much faster than wages and for some people wages rise very little, or not at all.

This means that nearly everybody was a little poorer by the year’s end.

Why have prices gone up?

What factors in our time have created this tremendous surge in prices? There are several, one of which has been shortages of food and various raw materials.

Too, the population “explosion” has put growing pressure on all commodities. Then there was the huge increase in oil prices within the last decade.

But a more fundamental reason for inflation for so many decades is that too many nations, and peoples, have been living beyond their incomes. This is especially so in the more “advanced” industrial countries.

For many years, most governments, businesses and many individuals have been spending more money than they have been making.

So they go deeper and deeper in debt. In the last few years this debt burden has grown faster. Now, the public and private debt in most nations is at its highest point ever.

Such borrowing and spending stimulates a greater demand for goods and services than normal. But when the supply of money grows faster than do the available goods and services, prices rise.

Then workers demand higher wages to make up for higher prices. Thus, a vicious circle is formed and an inflationary “psychology” is built up that is very difficult to stop without the taking of drastic measures.

What is behind this trend?

What has been behind this binge of borrowing and spending? Very often it has been selfishness, not being satisfied to live within one’s income. It is the desiring of more than one really needs or can afford.

Hence, if a person’s income (or a nation’s) does not permit him to buy the things he craves, he often goes into debt. But there is always a day of reckoning.

Debts have to be paid back, or bankruptcy results. And that is happening more often now, not only to individuals but to businesses and banks. Why, entire nations are now near bankruptcy!

Mounting debts have resulted in much distress, sleepless nights, working at two jobs, bickering between husbands and wives, even family breakups.

So while there are several reasons for inflation, one of the most basic is that of living beyond one’s income.

What can you do about it?

To live with inflation, you need to have a very realistic view of what you can do with the money you earn. Concentrate on the things you need, rather than on the things you would like to have but cannot really afford.

In difficult times, hard measures need to be taken. And these are difficult times.

It is a time to reassess your resources, time to sit down with your family and list the income you have against your expenses, then discuss how to cut back expenditures.

One immediate step that many people can take is not to add to their debts, unless it is an emergency. Constantly going into debt keeps a person “in the hole” financially.

And if misfortune strikes and the borrower cannot meet his payments, then the lender takes back his merchandise. The borrower also loses the money he has already paid.

Even if a borrower meets all his loan payments regularly, the interest charges can be so high that he ends up paying far more for the item than the listed cost.

That is like throwing away good money. True, not going into debt may mean not buying some of the nice things you desire.

But is that not better than taking on burdens that can easily result in greater troubles?

What other immediate steps can be taken to ease the pressures of making a living today?

How about examining some areas where you could save money and that would even do you good in other ways at the same time?

Cutting back non-essentials

One area where much money can be saved is in recreation, or entertainment.

Today some feel that they are not having recreation unless they spend money to go to movies, theaters, sporting events or to eat out at restaurants.

Yet in the “old days” most families did not have money for such things, and most of today’s forms of entertainment were not available to the average person anyhow.

Such forms of recreation, even on an irregular basis, can be very costly now. Hundreds of dollars can be saved by finding other recreation, such as within the family circle or with friends.

Outings and visits to interesting places can be enjoyable and relatively inexpensive.

Playing games with one’s children, or with adults, can be a refreshing break from the pressures of the day.

Get-together with friends, without one’s spending a lot of money on food or drink, can be pleasurable.

Indeed, when families concentrate on finding ways to enjoy themselves without spending much money, they are often surprised at the good results.

Another area where great savings can be attained is in weeding out bad habits.

Many people spend large sums of money each year on the tobacco habit—smoking. It is costly as well as injurious. Cutting out something that is so detrimental makes sense anytime, does it not?

Also, the overuse of alcoholic beverages can be very costly in both money and health. The price of such beverages is very high today, so cutting back on these will save money and perhaps one’s health too.

Many people who never gambled before are turning to it. They think they can make “easy money” this way. Others gamble to ‘get away from their troubles.

Yet, the overwhelming majority of gamblers must lose! Losing is built into gambling, because the “house” always makes a profit. Does this seem like a way to get away from troubles? On the contrary, it usually increases them.

Of course, much more could be said about saving money in other ways, such as buying cheaper foods but searching for more interesting ways of preparing them. Some are planting gardens where land is available.

Housewives can save much money by learning how to sew, and by not being overly concerned about keeping up with the latest fashions.

With less concern about such passing matters both women and men could often wear clothing much longer than they do now.

There is little you can do to stop worldwide inflation. You cannot control shortages, or price increases by producers.

However, as we have seen there are things that you can do to cope with the problem.