A friend recently told me, “Chinkee, I’m earning the same salary, but it feels like my money keeps shrinking.”

Can you relate?

His family wasn’t spending on luxury items. But every trip to the grocery store seemed more expensive. Gas prices were higher. Their favorite restaurant increased its prices. To make things worse, his company announced a hiring freeze and postponed salary increases.

That’s a perfect example of stagflation. It may sound like a difficult word, but it’s actually easy to understand.

A stagnant economy means the economy slows down. Businesses stop growing. Some companies freeze hiring. Others reduce their workforce. People become more careful with spending, so businesses earn less.

Now let’s look at inflation.

Inflation means prices keep going up. Food costs more. Gas becomes more expensive.

Rents increase. Your money buys less than it used to.

Now put the two together. Stagflation equals a stagnant economy plus inflation.

That’s why it’s one of the hardest economic situations. The economy is weak, but prices continue to rise. Jobs become harder to find. Salary increases become rare. Yet your daily expenses keep climbing.

Imagine this. Last year, a sack of rice cost P2,500. You were earning P30,000 a month.

This year, the same sack of rice costs P2,900. But your salary is still P30,000. On top of that, your company freezes hiring or starts laying off employees. That’s stagflation.

Your purchasing power goes down while job opportunities become more limited.

A simple way to remember it is this: Stagnation — the economy doesn’t grow. Inflation — prices grow. Stagflation — the economy doesn’t grow, but prices do.

So what should you do?

Years ago, whenever I heard bad economic news, I would simply hope things would improve. But I learned that hope is not a financial strategy. Instead of worrying about things you cannot control, focus on what you can.

Review your monthly budget. Cut back on unnecessary spending before it becomes a problem.

Avoid taking on new debt for things you don’t really need. Strengthen your emergency fund.

And if possible, look for ways to increase your income by learning new skills, starting a side business, or taking on extra work.

Families that prepare early are usually the ones who stay strong during difficult seasons.

The economy will always go through ups and downs. But good financial habits never go out of style. Spend wisely. Save consistently. Keep learning. Keep growing.

Remember, you cannot control the economy, but you can always control your attitude and your actions. And those choices can make all the difference in your financial future.

God is our provider, but He also calls us to be faithful stewards of the resources He has entrusted to us.