Do you have the financial resilience to cope with the high inflation rates? Do you have enough financial capability to cope with the changes? High inflation rate is a stage in life that we don't always think about. It is life uncertainty that requires reviewing your finances and coping emotionally. It is helpful to prepare rather than react and this can be a life lesson for the future. Often people are just surviving living pay cheque to pay cheque and believe they don't have enough savings to cope with the increased costs of living. Often the belief can be true but finding ways to increase income and reduce spending can help. Saving 10% of your income to pay yourself first and having an emergency fund is a helpful strategy to cope with this challenge. However emotional resilience and the ability to cope with distress can be helpful if you are feeling the financial pressure. On the other hand knowing the financial strategies to help you pull through will also help. This may include finding a side hustle, asking for a raise, cutting down incidental costs you can live without for a while, asking adult children to help financially by paying board money to teach them life skills and looking for government incentives and comparing utility bills can help such as electricity bills to find cheaper options. Often changing insurance companies will also help as many will provide discounts so you can become their customer. Emotional resilience is thinking differently to help cope. For example, you may decide on what you can do to manage the situation such as the strategies I provided above, seek help from a financial counsellor or advisor or review your budget. Financial counsellors can help advocate for you when in debt and financial advisors can help with reviewing your current situation and planning for the future. Financial counselling is reactive while financial advisors are proactive. Financial therapy involves mental health counselling and financial literacy to help cope with the distress and learn strategies to cope. Think about how you can cope rather than not coping, stay positive and hopeful, and write down a list of financial strategies to improve your situation. Coping with distress is also helpful. Distress is not an easy emotion to sit with as it can be uncomfortable but I'm sure most of you have hopefully learned that strategy with the uncertainties Covid-19 created. Body scanning where you focus on the emotion in your body and sit with it as well as mindfulness. Mindfulness is about being aware of your feelings and thoughts but gently shifting your awareness to your senses such as what you hear, see, touch, taste and smell. Mindfulness can be a way of life rather than a strategy and a practice that is helpful for everyone everyday. Find your own way to cope with distress and review your finances to manage these hard times and before you know it, you will adjust and life get easier to manage. Disclaimer:
The information provided above is not financial advice but intended for general information only. If you need help with improving your financial literacy and support to improve your financial behaviour and mental health, contact us today. For specific financial advice you can reach out to a financial planner.
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There are many reasons why people buy which may include being seduced by marketing strategies, wanting to be part of a community which is usually encouraged through social media and programs, to increase points to have something else you want or to manage emotions which can also be called retail therapy .
Understanding why people spend money can help manage the spending habits, which is especially helpful at a time during high inflation. Below are a few reasons why people buy: Cognitive bias - not thinking rationally when spending so checking in with your thoughts can be helpful. Questions to ask yourself may include: what emotions are driving my thoughts? Do I really need this or do I just want it? What will my life be like if I didn't buy this item? Can I wait and delay gratification? Encouraged by price - thinking this is a bargain and you don't want to miss out. Bargains can create an emotion that will influence your spending behaviour and create the fear of missing out. Wanting to be part of a group through satisfaction of the ownership of product - re-evaluate the meaning of the group and if you can get that satisfaction elsewhere. Is the group superficial and really healthy for you? Marketing tactics can include having your sensory needs met such as the right music, smell and feeling the product as you want to buy it (such as a cold drink from fridge), a shopping basket at the front of the store so you can spend more by filling it up and advertising that creates an expectation which is not real but makes you believe in it through the cognitive bias of expectancy. |
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February 2024
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