Controlling the outbreak of the Corona epidemic may lead to a sudden increase in the levels of spending and consumption, which threatens to rise in prices and rise in inflation rates, so how do you protect your savings in the face of these expected increases?
In a report published by the American "Daily Progress" newspaper, writer Catherine Brook says that the persistence of high inflation rates for a long time may constitute a great burden on individuals, because it raises the cost of living and eliminates savings and investment returns.
Below, the author provides some tips that you can follow to boost financial savings in anticipation of high inflation.
1. Continue to invest in stocks
The author believes that investing in stocks is one of the effective steps, because money markets have the ability to adapt to high rates of inflation, and these mechanisms often continue for long periods despite the possibility of crises in the short term.
In fact, the rapid rise in inflation rates may be a burden on companies, because they also bear the consequences of higher prices, and they must use more liquidity to maintain the same level of productivity.
And you can protect your money by investing in companies that can withstand during the period of inflation, namely those companies that make a lot of profits, and they can raise their prices without losing customers.
Before inflation rises, it will be appropriate to review your debts and look for opportunities to refinance (Getty Images)
For example, people will continue to buy tissues and milk even as the prices rise, but you may switch from the idea of eating out if you find that a hamburger will cost you $ 20.
2. Adding funds to the emergency balance
It is difficult to keep an amount of money in a savings account when the value of the currency is low, which is why some experts advise dumping your money when inflation is high.
But the writer says that she adopts a completely different approach, as she puts more money in the emergency fund, because keeping a small amount will not be useful - in her opinion - in light of inflation for two reasons:
First: If the prices rise, the weak balance will not be sufficient to cover living expenses after losing part of the income.
Second, high interest rates may lead to the exclusion of the option to obtain a cheap loan.
3. Debt review
If you have debts, then high inflation may be beneficial and harmful to your financial resources at the same time, as you can pay off your debts with an amount less than you borrowed, but you will also suffer from high interest rates.
Before inflation rises, it will be appropriate to review your debts and look for opportunities to refinance or obtain fixed-interest loans.