Inflation, Rising Costs and Budgeting Tips for Pakistani Families

Have you noticed how your monthly expenses feel heavier every time payday rolls around? Maybe you're cutting back on groceries,  skipping a family outing, or wondering how to pay the next electricity bill.  If this sounds familiar, you're not alone. Across Pakistan, families like yours are facing the same question: How do we make it through the month?

How will we make ends meet? 

The numbers are staggering 28.34% inflation as of January 2024, one of the highest rates in a decade. But this isn't just about numbers; it’s about real choices. For some, it’s skipping a luxury. For others, it’s choosing between feeding their children or keeping the lights on.

Take Shahid, a schoolteacher from Lahore, who’s struggling to keep his kids in school while managing rising utility bills  and food costs. Despite working overtime, Shahid is still facing a constant balancing act, one that many families across Pakistan know all too well. 



Inflation is reshaping lives everywhere from busy urban households   to small villages and it’s not something any of us can ignore. But here’s the thing: while inflation has changed the game, it doesn’t mean you can’t regain control. 

With over 40% of Pakistan's population  living below the

poverty line, With the right strategies and resources, you can navigate these challenges with confidence. Small, consistent

efforts can lead to meaningful financial stability, even in tough times.

Inflation has become a major challenge for both urban and rural families in Pakistan. The cost of living is rising, but wages aren't keeping pace.

Dr. Ijaz Shafi, Economist at the Pakistan Institute of Development Economics (PIDE)

The rise in basic food prices is unsustainable for low- and middle-income families, especially those who were already on tight budgets. There is a dire need for government intervention to curb inflation.

Dr. Sarah Khan, Senior Economist at Lahore University of Management Sciences (LUMS) 

Rural families are hit hardest, with agricultural costs soaring and education becoming unaffordable. In villages like Tharparkar, many parents are now forced to choose between paying school fees or buying food. This isn’t just a financial crisis; it’s a threat to the future of children and, ultimately, Pakistan’s economic stability.

In rural communities, the rising costs of education and basic needs are making it harder for families to invest in their children's future. This can have long-term consequences on the country’s workforce and economic growth.

Madiha Khan,  Rural Development Expert at Indus University 

Inflation is not just a financial issue; it’s a threat to family security, well-being, and future prospects. What can we do to lessen its impact? Let’s explore potential solutions in the next section.

Practical Budgeting Strategies For Pakistani Households 

Inflation affects each household differently, but with the right

budgeting strategies, families can stretch their resources further without compromising on life's  essentials. Let’s explore tailored tips  that can help families from all walks

of life navigate these challenging times.

Urban Professionals and Affluent Families 

As incomes rise, many find themselves succumbing to lifestyle inflation—upgrading living standards with frequent dining out, luxury items, and premium services. While these upgrades may seem enjoyable, they can add unnecessary strain on finances, especially in an inflationary environment like Pakistan's. Being mindful of spending habits can help preserve financial stability while maintaining a comfortable lifestyle. 

Invest for Stability:  

Consider long-term investments in real estate, mutual funds, or Sukuk bonds for steady returns. Consulting a financial advisor can help you build a secure portfolio, ensuring a stable financial future with minimized risk.

Cut Back on Luxuries:  

Cut down on non-essential purchases like imported goods or dining at expensive restaurants. Explore local eateries and review subscriptions to ensure you're only keeping what you truly need, helping to save money and prioritize essentials.

Monitor Utility Bills:

Energy consumption can rise quickly. Switch to energy-efficient appliances like LED lights and inverter ACs and be mindful of usage by using fans or limiting AC time, helping to reduce electricity bills and environmental impact. 

Middle-Class Families

Middle-class families often feel the financial strain from rising education costs, daily living expenses, and the challenge of saving for the future. Tuition fees, school supplies  and extracurricular activities consume a large portion of the budget, while escalating   grocery, fuel, and utility costs add additional pressure. 



Prioritize Essentials: 

Start by allocating funds for the most critical needs: housing, food, and education. Choose affordable staples like rice, flour, and lentils while cutting back on non-essential purchases like luxury snacks or branded products. This will help free up funds for more important expenses.

Buy in Bulk: 

Take advantage of bulk buying for non-perishable items such as rice,

oil, and pulses by visiting wholesale markets. You can also save on school supplies by purchasing them ahead

of time or during seasonal sales,

which reduces last-minute costs. 

Utilize Local Saving Schemes:

Consider Pakistan’s government savings options like National Savings Schemes, Prize Bonds, and Behbood Savings Certificates. These low-risk programs offer structured ways to grow your savings, providing security for emergencies or supporting long-term financial goals. 

Youth and Students 

For young people, managing education costs and pocket money  can be particularly challenging. With rising tuition fees, textbooks, transportation, and living expenses, careful financial planning becomes crucial to make ends meet while balancing studies and personal life. .



Use budgeting

apps:

Track your spending and set savings goals with apps like Mint or YNAB (You Need A Budget). These apps offer a clear overview of your income and expenses, helping you identify areas to save and set achievable goals. 

Explore Part-Time Earning Opportunities: 

Use freelancing platforms like Upwork, Fiverr and Freelancer to earn extra income. Offer services like writing, design, or tutoring. These gigs provide flexibility, helping students earn while studying and build valuable skills for future careers.

Make Use of Affordable Learning Resources: 

Save on costly textbooks by using free online courses and e-books. Platforms like Coursera, Khan Academy, and edX offer affordable, high-quality learning resources, enabling you to study at your own pace without financial strain.

Government Subsidies: 

The Benazir Income Support Programme (BISP) provides financial aid to low-income families, and the Ehsaas Kafalat Program offers financial assistance through stipends to deserving women, aimed at alleviating poverty and supporting vulnerable households.

Vocational Training: 

Join NAVTTC-sponsored programs to acquire skills in carpentry, tailoring, or digital marketing. These practical courses equip individuals with marketable expertise, creating pathways to improved job prospects and potentially higher earnings for a better future.

Community Collaboration: 

Join local committees to save collectively and access funds when needed. Additionally, benefit from food banks like Saylani Welfare Trust and Edhi Foundation, which provide essential rations and meals to support struggling families.

Plan for medical expenses:

The Sehat Card provides free medical treatment at government hospitals for registered beneficiaries. It covers hospitalization, surgeries, and outpatient services, ensuring accessible healthcare for individuals and families in need across Pakistan.

Downsize housing:

Consider downsizing to a smaller home or relocating to more affordable, semi-rural areas to reduce living costs. A smaller property can lower utility bills, maintenance expenses, and property taxes, leading to significant savings

Small-scale passive income:

Retirees can generate passive income by investing in low-risk financial products like National Savings Certificates (NSCs) or renting out property. These options provide a steady income stream while minimizing risk and ensuring financial stability. 

Inflation may be squeezing budgets, but it doesn't have to squeeze your peace of mind. While rising costs are an undeniable challenge, there are ways to regain control, adapt, and even thrive in these tough times. Whether it's leveraging government programs like BISP  and the Sehat Card, adjusting your spending habits, exploring side gigs, or planning ahead for retirement, every small step you take toward financial awareness and planning can make a big difference. 

Remember, the struggle is shared across families in every corner of Pakistan, and by supporting each other through community-based savings, strategic budgeting, and mindful spending, we can navigate these times with resilience and hope. The future may be uncertain, but with the right tools and mindset, you can face it confidently, knowing that the collective effort of families like yours will create a stronger, more financially secure nation. 

Let’s take action now, not just to survive, but to build a future where financial stability is within reach for everyone. Together, we can make it through this.