How to Start Saving Money: 10 Proven Money Saving Tips to Survive Economic Inflation in Malaysia

The general price level of goods and services in an economy rises over time during economic inflation. This can erode money's purchasing power, so someone who saves a lot during an inflationary period will be able to keep the same level of purchasing power as prices go up.

For example, if an item costs RM100 today and the inflation rate is 3% per year, then that same item will cost RM103 in one year. So, if a person saves RM100 today and the inflation rate remains at 3% per year, then in one year, that person will only be able to buy goods or services that cost around RM97. This is because the purchasing power of the saved RM100 has decreased due to inflation.

As a result, it is critical to save money during economic inflation to maintain purchasing power and be able to afford the same level of goods and services in the future.

Bear in mind that not everyone has the same economic level, you should try to follow these tips according to your financial situation. It would be harder if you are earning less than a living wage but one of the ways for you to boost your income by hustling on the side if you have the skills to do it.

If you earn more than your core expenses and financial commitments, the following are 10 proven ways to save money fast during this economic inflation:

1. Create a budget and stick to it: The first step to saving money is understanding where your money is going. Create a budget that outlines your income and expenses and track your spending to make sure you stay on track. This will help you identify areas where you can cut back and allocate more money towards saving.

2. Cut unnecessary expenses: Take a close look at your budget and identify any expenses that are not essential. These may include subscription services, expensive habits like smoking or excessive drinking, or even dining out frequently. Cutting back on these expenses can free up a significant amount of money that you can put towards saving.

3. Boost your income: If you're struggling to save money, one option is to try to increase your monthly or annual income. This could involve negotiating a raise at your current job, taking on additional work or freelance projects, or starting a side business or some may call it a “side hustle”. Any extra income you can bring in will help you save more money on top of the salary you get at the end of the month.

4. Save automatically: One of the easiest ways to save money is to set up automatic transfers from your salary account to a savings account. This way, you won't have to remember to transfer the money manually and you'll be less likely to spend it on something else. You can also set up automatic contributions to your ASB, high-interest savings account, gold account or another retirement account to save for the long term.

5. Use cash instead of credit: Using cash can help you better track your spending and avoid overspending. When you use credit, it's easy to lose track of how much you're spending and end up with a large credit card bill at the end of the month. By using cash, you'll be more mindful of your spending and be less likely to make impulsive purchases.

6. Shop around for the best prices: Don't be afraid to negotiate or shop around for the best prices on items you need to purchase. This could mean haggling with a salesperson, comparison shopping online, or using coupons or discounts. By spending a little bit more time on research, you can often find a better deal and save money in the process while living frugally to ensure you will always have extra money to save.

7. Clear high-interest debt quickly: If you have high-interest debt, it's important to come up with a plan to pay it off as quickly as possible. This could involve transferring your balances to a lower-interest credit card, consolidating your debt, or working with a financial planner to come up with a debt repayment plan. Paying off your debt will free up more money that you can put towards saving.

8. Build an emergency fund: An emergency fund is a crucial part of any financial plan, and it's especially important during an economic recession. Make sure you have at least three to six months' worth of living expenses saved in case of an emergency, such as a job loss or unexpected medical expense. This will give you a financial cushion to fall back on if you need it.

9. Avoid taking on new debt: Try to avoid taking on new debt, especially if you are already struggling to pay off existing debt. There is no point in digging up a new hole to fill another hole when you can just fill the existing hole slowly.

10. Seek professional advice: If you are having trouble managing your finances, consider seeking the advice of a licensed financial advisor or counselor. They can help you develop a plan to save money and improve your financial situation. For example, you can reach out to AKPK to seek financial advice or help you gain financial control by managing your debt.

In summary, saving money during an economic recession is all about creating a budget, cutting unnecessary expenses, boosting your income, saving automatically, using cash instead of credit, shopping around for the best prices, planning to reduce or clear your debt, and building an emergency fund. By following these tips, you'll be better prepared to weather any economic storm that may come your way.

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