When inflation is nearly 10 percent but the increase of income is lower than the rate, how a person then will manage his personal finance to save for the future?

Salaried persons are in the most vulnerable position as there is no Consumer Price Index (CPI) adjustment each year and if the salary rise at the end of the year is less than 10 percent.

The retired person or someone who also depends on the monthly interest income from deposits, they are not in a good position because banks offer a maximum 9 percent interest on deposits. Moreover, the interest income is reduced by 10 percent after deducting tax at source. So, ultimately the return is a maximum of 8 percent.

In that situation, how will manage his personal finances?

Our personal finance is mainly surrounded by the simple five basics. Let's see how we can manage our five personal finances to grow our savings and investments to secure our future financial lives.

Income

If your income is equal to or less than your monthly income during this high inflation period, you will have no savings or you will have a negative growth. This means you will have to manage spending by taking a loan from someone.

As the increase of your income from the current source is limited, you have to find a side hustle to increase your earnings, so that it goes above the monthly spending amount to save money.

Spending

Spending is the main factor that wipes out our income and it's terrible when we see the price increasing every day.

The best solution to limit your spending is to scrutinise day-to-day expenses and identify the areas that are not required in order to stop spending in those segments in the upcoming months.

Savings

If your income is handsome but your spending is uncontrollable, your large amount of income will not give you a good amount of savings. So, you have to balance your income and expenses.

Always try to manage your earnings and spending smartly to increase your savings.

Investing

Investing is the next step after your savings. You may have short-term, mid-term and long-term savings goals and based on them you have to plan your investing decision.

It's usual that you will earn a higher rate of return from long-term investments than short-term or mid-term investments due to the timeframe. So, make your decision based on your future financial requirements.

Protection

Protecting your money is most important. If you put your money in place to get an unbelievable return overnight, it will be insecure. Sometimes, we read the news that investors' money has gone to bad people.

It's your money that you have saved day by day and it takes a long time. So, know about the organisation before investing, otherwise all your money will be gone in one night.

Jasim Uddin Rasel is the author of Smart Money Hacks.