With the cost of living rising day by day, inflation is rising too, which means the prices of things are going up over time and affecting people’s cost of living.
A little rise in inflation is okay, but if it is rising rapidly then you need to manage your money carefully to beat inflation in 2025.
- Example: If the cost of a cup of coffee is ₹30 today, and next year it is ₹35, then it is called inflation. It is mainly due to an increase in demand or production costs.
- CPI Data: Consumer Price Index means the measurement of change in prices of everyday items like food, fuel, and clothes. When CPI goes up, it means inflation is rising.
In April 2025, India’s CPI inflation dropped to 3.16%, the lowest since 2019, mainly due to a drop in food prices. - Real Wages: It means that if the prices go up and salaries remain the same, then real wages go down, because people can buy less with the same money and vice versa.
In India, real wages are slowly improving as inflation falls, but progress is uneven across jobs and regions. - Monitoring: You can monitor inflation by tracking CPI (Consumer Price Index), WPI (Wholesale Price Index), RBI Reports, and from news or websites.
- Action: To beat inflation in 2025 when prices are rising, you have to take some smart actions, such as cutting unnecessary spending and investing your money in stocks wisely. Track inflation monthly using CPI or news updates.
Adjusting Your Budget for Inflation
If inflation is rising, then it is extremely important to adjust your budget carefully to avoid overspending and ensure that your income covers all essential needs. This means that you might spend more on groceries, fuel, and bills without realizing it. To manage this, you need to save money by following these tricks:
- Review your expenses in detail and cut back on non-essential items like eating out, or avoid buying unused subscriptions and memberships.
- Focus on needs over wants, which means giving priority only to the food, rent, bills, healthcare, and transport.
- Look for discounts, offers, or cheaper options by shopping from the wholesale market. They usually provide you with items at less price than the branded items, even though there is no difference in the quality of the products.
- Buy stocks carefully because prices can change fast, and you can lose money because not all stocks grow with inflation.
- Track your spending regularly so that you stay in control of your spendings. You can note down your spending in a notebook or simply use an app to track down all your spendings in detail.
Investing to Beat Inflation
- Stocks: It means that wisely investing your money to buy stock in companies that grow faster. When you buy a stock, you own a small part of that company and this helps your money keep its value or grow over time.
If a stock gives you a 10% yearly return and inflation is 7%, then you gain 3% of profit in real terms. - Mutual Funds: For beginners mutual funds are beneficial, where you give money to the expert and then they buy different company shares for you, which allows you to invest your money in the market and earn high returns in the future.
- Gold: During inflation, gold prices often rise, and it is a good option you buy physical gold or digital gold and keep it to protect your money from losing value.
- Public Provident Fund (PPF): It is a safe government-backed investment scheme with high return and minimum risk. It is also good for long-term saving where you save money safely and you can earn fixed interest every year.
Platforms
- For investing money in stock & mutual funds, you can use Groww, Upstox, ET Money and Zerodha platforms.
- For investing in Gold, you can use SafeGold, MMTC-PAMP, and Gold ETFs via Groww or Zerodha.
- For investing in PPF & Government Bonds, you can use RBI Retail Direct and India Post or Bank Portals.
Actions
Basic actions you need to take while investing to beat inflation are to
- Start early, which means begin investing as soon as possible, even with a small amount.
- Use SIPs (Systematic Invest Plans), which means you can invest a small amount of money regularly in mutual funds.
- Invest in stocks, mutual funds, gold, and government-backed plans.
- Check the performance of your investment every month and adjust if needed.
- Always use trusted secure platforms like Groww, Zerodha, Upstox, ET Money etc.,
Income-Boosting Strategies
To beat inflation in 2025, you need to boost your income even if you have a secure job, and to do so, you can use the following tactics
- Freelance or Side Gigs: To boost your income easily, you can start writing an article or designing graphics on platforms like Upwork, Fiverr, or Freelancer. It is the best way to monetize your hobby into skills and start earning from it.
- Start a Small Business Online: Sell your homemade products or work like paint or art online via social media, Amazon, or Shopify. Even a small profit can help you boost your income and beat inflation in the future.
- Invest Smartly: Put your money in Mutual Funds, Stocks, or Gold investments smartly to grow your wealth faster than inflation.
- Content Creation: You can start a YouTube channel by blogging, or an Instagram page, and create some fun content of your choice and hobby and from that you can boost your income easily, because almost everyone is using social media and YouTube these days.
Negotiation
During inflation, ask for a salary hike by negotiating to boost your income, and this can be done by
- Showing your skills and achievements.
- Using inflation as a reason by saying “With rising costs, I’d like to discuss the slight hike in salary.”
- Explaining how you help the company grow, and stay professional and clear.
Actions
To boost your income to beat inflation, you need to take some simple actions by starting a side hustle, investing regularly in stocks, by learning new skills, asking for a raise, creating content on different social media platforms, and by regularly tracking your spendings.
Protecting Savings from Inflation
In 2025, prices are rising due to inflation. For example, if you keep ₹2,00,000 in a savings account with 3% interest, but inflation is going at the rate of 6%, then your money loses value and it can buy less next year.
To protect savings from inflation, you need to follow these basic tips:
- Invest ₹2,00,000 in a mutual fund that gives a 10% return, and you can earn around ₹20,000 in a year.
- After one year, you have the total amount of ₹2,20,000
- Inflation has gone up by 6%, but your money grew by 10%, and you beat the inflation easily.
- Also, if you keep it for more years, your money can grow even more because of compounding.
Keeping too much cash can reduce value over time because prices go up due to inflation, but cash doesn’t grow.
- So you have to keep only one week of cash for your daily expenses or you can keep 2-3 months of your expenses in cash. If you don’t wanna keep too much cash, then you can simply transfer that amount in your savings account.
- Invest the rest in mutual funds, stocks, gold, or PPF to grow your money over time.
- Also, you need to keep your emergency fund in a place where you can quickly and easily take it out in the time of your need, like during some medical emergency, or urgent repairs. This is called liquid emergency fund.
Hedging With Hard Assets
Hedging with hard assets to beat inflation in 2025 means investing your money in physical things that keep their value or grow when prices rise, and grow your wealth. Because the value of cash or fixed savings falls when prices of goods and services go up.
Common Hard Assets
- Gold: Gold investment has been the most trusted source to grow money, especially during inflation. Because when inflation rises, gold prices often go up too, and if we buy physical gold, coins, jewelry, or gold during that period, we can beat the inflation very easily.
- Real Estate: Property prices also rise when inflation rises, and this is because construction costs and demand are increasing. You can also earn from rental income, which also rises during inflation. It is a long-term investment but has less liquidity than gold assets.
Example
If you have ₹5,00,000 and you’re worried about inflation rising at 6% this year, then you have to put:
- ₹2,00,000 in gold assets, and suppose the gold price grows by 10%
- ₹3,00,000 in a real estate fund, and suppose the property price and rental price increase by 8%
After one year:
- Gold investment assets grow to ₹2,20,000
- Real estate funds grow to ₹3,24,000, and you get the total of ₹5,44,000 after one year.
Platforms
- For Gold: Platforms used for hedging with gold are Groww, Zerodha, Upstox, Paytm Gold, PhonePe Gold, and SafeGold etc.,
- For Real Estate: Platforms like 99acres, Magicbricks, NoBroker, etc., are used for hedging with hard assets.
Conclusion
To beat inflation in 2025, you don’t have to focus on just saving money. You need to invest money smartly in a safe environment like mutual funds, gold, and real estate so it grows faster than rising prices.
Limit cash usage and save extra funds for emergencies like medical and urgent purposes.
Stay consistent and keep learning about investment and make money work for you, so that you can beat inflation anytime.