How to deal with inflation in Colombia: key strategies to protect your pocket

The evolution of inflation is a topic of great debate in Colombia due to its direct repercussions on the well-being of the population and its impact on the economic and political stability of the country.

(More: Buying for pleasure or necessity?: the dilemma that can put your wallet in a bind),

Over the past two years, the country has seen a considerable rise in inflation. Despite a downward trend, the last two months, May and June, have shown a stagnation in this decline.

Several factors have contributed to this situation: rising food and fuel prices, as well as disruptions in the global supply chain that have increased import costs. These elements have eroded the consumer purchasing power and increased cost of living.

(Read: A 2 for 1 or a 3 for 2: which is the most convenient promotion and with which you could save the most?).

In this context, the Bank of the Republic, in an attempt to control inflation, has raised interest rates, and although this measure is necessary to stabilize prices, it has also resulted in higher financing costs.

Before this panorama, Financial management becomes a crucial issue for Colombian householdsMaintaining purchasing power is a priority, and to this end, financial expert Andrés Felipe Jiménez Cortes, from the Konrad Lorenz University Foundation, outlined a series of recommendations.

(See: This is what Colombian households spend for every 100 pesos they have in their pockets).

Recommendations for managing your money responsibly

– Adjust the budget: It is essential to keep a detailed record of expenses to identify areas where unnecessary spending can be cut. Distinguishing between needs and wants helps determine what is essential.

– Preventive savings: Establishing an emergency fund is vital to deal with any unforeseen event without relying on loans. This fund provides security and financial peace of mind.

– Strategic investments: In times of high uncertainty, it is advisable to invest in fixed income, which offers greater security even if the return is low, compared to variable income.

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– Debt reduction: Reducing debt payments is crucial. Paying down principal on higher-interest debts and refinancing lower-interest debts can reduce your financial burden.

– Financial education: Staying informed and educated on financial issues and new opportunities helps to have a better perspective of the economy and improve the ability to negotiate financial transactions.

Debts

PHOTO: iStock

Effective financial management includes debt reduction and refinancing loans at lower rates, prioritizing the payment of high-interest debts. These actions are crucial to minimize the financial burden and costs associated with debt in a high-interest rate environment.

In summary, In the face of current inflationary challenges, sound financial management and informed decisions are essential to maintaining economic stability. and the well-being of families in Colombia.

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