Gas, water, electricity, as well as flour and meat. Price hikes on several everyday commodities and services have resulted in a tremendous increase in the cost of living for Jamaicans, several of whom now have to be curtailing spending in order to stretch their income.
Inflation has reached a seven-year high, rising to 9.7 per cent in January, according to the Bank of Jamaica, which has forced the central bank to react by implementing measures on several occasions, including hiking policy rates, to reduce the burden on consumers and protect the value of the Jamaican dollar.
Much of the current burden is the result of high freight costs triggered by the two-year COVID-19 pandemic. And, with the current Russia-Ukraine war raging in Eastern Europe, prices have begun to soar further, with oil the first to so far to react, rising to more than US$90 per barrel- it’s highest since 2014.
Given that the ongoing situation is likely to persist for some time, JN Bank’s Michael Collins, who leads the organisation’s youth banking arm, and is also an ambassador for the JN Foundation’s BeWi$e financial empowerment programme, recommends a few measures consumers can implement to stretch their dollar and reduce the impact of the rising prices on their households.
1. Budget: If one was not budgeting before or doing so consistently, now is the time to prepare a budget and stick to it, Mr Collins says.
“Plan carefully how you’ll spend and think about what goods or services you can substitute for cheaper alternatives. Make meaningful adjustments, so that you’ll have more funds to take care of emergencies, and to save,” he advises.
2. Manage your fuel usage: “Work from home if you can,” counsels Mr Collins. “If you must travel to work, plan your routes and, where you’re able to, even the time of day you travel, so that you can reduce your time in traffic. Leave earlier, for instance, or start working from home, if that is possible, and leave a little later.”
Mr Collins says, where possible, employees should negotiate for more flexible time with their employers, and employers should also explore the feasibility of implementing shifts.
“This is especially for small businesses, such as salons or barbershops. Consider allowing some workers to come in at different times, depending on the customer flow, so that your employees can also have an opportunity to cutback,” he said.
He also recommends carpooling, where conceivable.
“Carpool with your partner, son, daughter or neighbour, where possible, to better manage fuel costs; and be vigilant about purchasing from stations that offer you the best value,” he said. He pointed out that persons can find up-to-date information on the fuel prices offered by various petrol stations island-wide on the Jamaica Automobile Association’s website.
Mr Collins also encourages motorists to reduce their speed and ensure their tyres are properly inflated.
“Speeding requires your vehicle to use much more fuel, and low tyre pressure also affects your vehicle’s fuel economy,” he says. “Therefore, you want to ensure that you’re travelling within the speed limit and that your tyres are properly inflated. It’s safer and saves you money. Again, the JAA provides some great tips on how you can conserve fuel.”
3. Plan your meals: Instead of purchasing lunch daily, Mr Collins recommends that persons plan their meals ahead, and take lunch to work as much as possible.
He adds: “Reduce your purchasing of snacks and fruit juices, and instead rely on the fruits in season, especially if you have fruit trees. Many local fruits are versatile and, with creativity, you can create a variety of meals and snacks that are healthier, cheaper and even tastier.”
In addition to planning meals, he encourages persons to shop carefully to ensure they receive the best value for their money; choosing cheaper alternatives, which do not compromise on nutrition; and purchasing in bulk or at wholesale prices, where probable.
“Food prices are among the most affected by inflation, so you’ll have to make adjustments to get the most out of your money,” he says.
4. Convert things you no longer need to cash: If one has assets around the house that they may have in excess, or no longer need, Mr Collins says persons should consider how those can be sold.
“Perhaps you have two phones and one has the capacity for dual SIM cards. Do you need two phones? Consider using the phone with the dual SIM and selling the other,” he notes as an example.
“Have a yard sale to sell those items you no longer need,” he says.
5. Use your skills to earn extra income: In addition to converting unused assets to cash, now is the time to look at how one can use their skills to earn additional income, he says.
“You may be good at baking or plumbing. Use those skills in your free time to earn extra,” Mr Collins says, pointing out that where certification is required, persons should seek out the correct certification.
6. Consolidate loans:
“If you have several loan payments being deducted from your salary from more than one financial institution, shop around and see how you can convert them into a single loan with one affordable interest rate, to give yourself more breathing room. If it’s a single loan or loans with one financial institution, explore how you can refinance the terms and extend the period, so that you can lower the payments,” Mr Collins recommends.
