How to protect yourself from food inflation?

Government reports indicate that food inflation is running at about 10%. The net effect for salaried individuals is that the cost of living is going up dramatically, especially when it comes to running the kitchen. So how can you your wallet without compromising your stomach?

Here we give you a few tips that you can use to better manage your expenses on food.

1. Stick To A Budget

If you don't have a domestic budget that tracks your spending you should create one now, and thereafter stick to it. If you consciously allocate a part of your monthly take home income to kitchen and food expenses, then you will be better prepared to live within this. Additionally, during the budgeting exercise you will see what are the other areas that you are spending money on. Once these are revealed, you might realize that some of these expenses could be temporarily cut down or stopped completely so that you can use these funds towards rising food costs.

1. Buy From A Wholesale Market

Every middleman in the supply chain from the farmer to your neighborhood green grocer you buy from charges their profit margin on the produce that they sell. Buy your fruits and vegetables from a wholesale market so at least you avoid paying the mark-up charged by your neighbourhood grocer.

1. Pool Your Purchases With Your Friends And Family

Making those trips to the local "mandi" and carrying back bags of fresh produce in your car means you are probably going to spend some money on fuel costs. So, why not carpool so you can share the cost of driving. Additionally, why not pool orders from different households so you can buy in bulk and avail of discounts.

1. Make Some Sacrifices

The cost of a restaurant meal or movie tickets for an entire family can be close to the average family's fortnightly cost of green groceries. So while food prices are high, cut down on the discretionary entertainment spend as much as practically possible. Rather than ordering a pizza for delivery, make one at home. Rather than going out to the movies, just watch one at home on TV.

1. Don't Leave All Your Money In Fixed Deposits

This one is more of a financial tip. FDs currently earn returns of about 8%. After taxes these come to about 5%-6%. With food inflation at 18%, one doesn't have to be a financial genius to figure out that the return on our FDs will be insufficient to keep up with this kind of inflation. Depending upon your risk appetite and financial goals, create sources of investment income that in the long-term yield higher than the current annual level of inflation.

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html