How to Save Money in Volatile Economic Conditions of Pakistan

The volatile economic conditions of Pakistan have caused serious troubles for investors. They are either forced to take their money out of the market or face losses. Common Pakistanis are also currently experiencing the heat resulting from the dwindling economy. 

Moreover, Pakistan is currently witnessing a massive increase in the import bill, causing an immense imbalance between exports and imports. Commodity prices in Pakistan have hit an all-time high, but this is not the only predicament. The country’s currency is also experiencing record depreciation against the dollar. Get to know currency depreciation.

An ever-recurring political turmoil has further plunged the economy towards a downward slope. Two days after the by-elections in Punjab, the Pakistani Rupee plunged to an all-time low against the US Dollar on July 19, 2022, causing further problems for the country’s dwindling economy.

 

 

With the Russo-Ukrainian war raging on in Eastern Europe, the oil and wheat market has taken a hit which has spruced problems globally. 

 

Effects On Pakistan’s Consumer Price Index (CPI) June 2022

According to Trading Economics, Pakistan had an average CPI score of 80.16 points from 2001-2022. However, due to a massive hike in oil prices, double-digit inflation across the globe, and worsening political turmoil in the country, the CPI score hit an all-time low of 175.71 points in June 2022.

The following table shows how Pakistan’s CPI has changed during June 2022:

 

 

Consumer Price Index (CPI) Forecast for Pakistan

According to various macro models, economic experts, and the Pakistan Bureau of Statistics, Pakistan’s consumer price index (CPI) is expected to be 181.64 points at the end of this quarter.

The forecast for coming years is also very upsetting as experts are predicting Pakistan’s CPI to trend around 202.49 points in 2023 and 218.69 points in 2024.

 

 

 

Problems for Investors and Startups

All these problems have created volatility in Pakistan’s economy. Rather than getting good returns on their investments, investors have experienced detrimental losses. The macroeconomic conditions have caused the closure of startups across the country.

These startups have been influential for Pakistan in attracting foreign investments and supporting the unstable economy. However, the current condition of the economy is highly volatile and demotivating for investors and even the general masses.

Graana.com, Pakistan’s smartest property portal, has compiled a comprehensive guide for everyone who wants to save and invest money during these volatile economic conditions. 

 

Tips to Save Money in Volatile Economic Conditions of Pakistan

The most concerning topic for every Pakistani these days is finding ways through which they can save their money. With prices of commodities touching new highs every day, saving money seems impossible.

However, the following ways can help you in saving a good amount of money each month:

• Break down the payments
• Eliminate your debt
• Create a budget
• Set saving goals

 

 

Let’s discuss these methods in detail.

 

Break Down the Payments

One of the most significant problems currently faced by the general public is purchasing various commodities and services that serve everyday uses. These payments make up 50-70% of the total monthly income of an individual.

Gas and electricity bills, rent payments, loans, educational expenses, utilities, and various other items make up these payments.

However, if these payments are broken down and budgeted properly, it can be possible for people to save money every month. They can, later on, use this amount to make better investments.

 

Eliminate Your Debt

 

 

Achieving good financial goals requires debt payments as a priority. Most people want to save money for emergencies and they ignore the importance of laying off their debts.

People should understand the importance of debt payments and create a customised budget plan to achieve long-term financial goals.

The following are three major benefits of debt payments:

• It helps to improve credit scores.
• Once the debt is paid, saving and investing goals can be achieved.
• Debt payments relieve stress and allow you to focus on investment goals.
• The percentage of interest on a long-term loan can be reduced if payments are made in quick succession.

 

Debts are financial burdens that can drag your credit score. If you have a long-term investment goal, such as buying a home or making an investment in some other field, then having a positive credit score will be pertinent.

People usually have two types of debts; small-balance debts and high-interest debts. Focusing on small balance debts first can pave the way for large monthly payments of high-interest debts. So, paying the debts first can help individuals in achieving their financial goals.

 

Create A Budget

 

 

The most important strategy to save money for any purpose is to have a budget plan. Whether you have a single source of income or multiple sources, without a proper budget, you will end up wasting all of the money.

A budget will help you to:

• Manage your expenses effectively
• Monitor your objectives
• Identify problems of over-budgeting
• Make confident financial decisions
• Allocate appropriate resources to ‘wants’ and ‘needs’

 

However, creating a budget is not a simple task. For that, you need to consider your expenses, future goals, income, and many other things. The following checklist can help you create a realistic budget:

• Calculate your income
• Calculate your monthly expenses
• Gather your financial paperwork
• Make adjustments to the budget
• Set realistic goals
• Create a list of monthly expenses

 

Set Saving Goals

 

 

Setting realistic saving goals can help you with your budget and financial goals. The 50/30/20 formula is the most common saving technique used by most individuals who want to achieve their financial goals.

50% of the total monthly income can be specified for daily needs, 30% for wants, and 20% for savings. Long-term practice with this formula will eventually get you positive results.

The following tips can also help you a lot in saving money:

• Eliminate unnecessary bills.
• Use less energy; electricity, and gas.
• Get better communication packages.
• Go shopping with a list and shop smarter.
• Pay your bills on time to avoid penalties.
• Avoid unnecessary trips to the markets.
• Trim your daily expenses.
• Cut the cost of your water bills.
• Prefer to eat at home.
• Use public transport.

 

These money-saving tips can help a lot, especially under the volatile economic conditions of Pakistan. Moreover, everyone needs to keep a track of their resources to cope with rising inflation.

For more information, visit Graana Blog

 

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FAQs

Here are some FAQs related to tips to save money in Pakistan

 

What are some easy ways to save money in volatile economic conditions of Pakistan?

Some easy ways to save money in Pakistan include creating a budget, avoiding unnecessary expenses, shopping during sales and discounts, using public transportation or carpooling, and cooking meals at home instead of eating out.

 

How can I reduce my monthly expenses in Pakistan?

You can reduce your monthly expenses in Pakistan by cutting back on non-essential items such as entertainment, luxury items, and dining out. You can also look for cheaper alternatives for necessary expenses such as electricity, gas, and phone bills.

 

How can I save money while shopping in the volatile economic conditions of Pakistan?

To save money while shopping in Pakistan, you can shop during sales and discounts, compare prices across different stores, and buy in bulk for frequently used items. You can also use discount coupons, loyalty programs, and cashback offers.

 

How can I save money on transportation in Pakistan?

To save money on transportation in Pakistan, you can use public transportation such as buses and trains, carpool with colleagues or friends, or opt for a motorcycle or bicycle for short distances. You can also save money on fuel by driving efficiently and maintaining your vehicle properly.

 

How can I save money on utility bills in Pakistan?

To save money on utility bills in Pakistan, you can conserve energy by turning off lights and appliances when not in use, using energy-efficient appliances and light bulbs, and reducing water consumption. You can also compare utility providers and switch to a cheaper option if available.

 

How can I avoid unnecessary expenses in Pakistan?

You can avoid unnecessary expenses in Pakistan by creating a budget, tracking your expenses, and avoiding impulse purchases. You can also prioritize your needs over wants and avoid lifestyle inflation by living within your means.

 

How can I save money on food in Pakistan?

To save money on food in Pakistan, you can cook meals at home instead of eating out, plan your meals ahead of time to avoid wasting food, buy in bulk for frequently used items, and shop at local markets for fresh produce.

 

How can I increase my savings in volatile economic conditions of  Pakistan?

You can increase your savings in volatile economic conditions of Pakistan by setting financial goals, automating your savings, investing in a diversified portfolio, and earning additional income through freelance work or a side business. You can also avoid debt and prioritize paying off high-interest loans.