Inflation-busting ideas: 6 ways to protect your finances from increased living costs

It’s safe to say we’re all feeling the weight of rising energy costs and the rate of inflation.  Here are 6 ways to minimise the impact of inflation on your finances:

Consolidate your loans

Juggling credit card bills and personal loan payments can be stressful at the best of times. But with the cost of living at an all-time high, our bank balances are really feeling the burden. 

Whilst there is no quick fix, consolidating your loans can help lighten the load by making your monthly repayments far more manageable. Instead of balancing various interest rates and payment plans, you can cover all your monthly repayments in just one sum. What’s more, clients with good credit scores can often expect to receive a reduced interest rate! 

So if you want to tackle your debt (and save some money in the process), consider consolidating your loans. 

Start investing

Investing might be the last thing on your mind right now. But it shouldn’t be. 

Investing doesn’t require tons of disposable income or large financial commitments. In reality, you start can investing with as little as £1! But how will this help with inflation?

Thanks to inflation, money that isn’t gaining interest is essentially losing value. Why? Because as prices increase, your money retains its original value, which is worth less than the current inflation rate.

So, start investing your spare money into stocks. You don’t have to take huge risks – you can open an index fund or invest in household names like Google or Apple. Whichever you choose, the priority is making sure your money is working for you.

Shop around for cheaper insurance

Home insurance, car insurance, life insurance – the list goes on. Yet whilst it’s important to insure our assets, you want to be sure you’re not overpaying for your coverage. So start doing some research.

Comparison websites allow you to compare rates quickly and easily, so you can either secure a better deal and move to another company or negotiate a lower rate. Either way, you’re saving money!

(Finance tip: with a bit of spare time on your hands, you can also do the same for monthly subscriptions and household providers.)

 Save up your spare change 

We’ve all heard the saying, ‘take care of the pennies, and the pounds will take care of themselves.’  Well, this next suggestion is all about that!

Several banks now offer a round-up feature that allows you to save your additional change or invest it. For example, if you paid £3.60 for a latte, the app would round the price up to £4.00 (placing 40p directly in your savings). It may sound insignificant, but these small amounts really add up!

You can check if your bank has its own round-up feature, or you can create a savings account with Monzo and connect it to your current bank account. 

Salary sacrifice

Salary sacrifice is about sacrificing a portion of your monthly salary in return for non-cash benefits. These benefits can include childcare arrangements, company cars and even health insurance. But what does that have to do with inflation?

With tax and national insurance on the rise, you can limit those deductions by reducing your monetary income, allowing you to save money and maintain your lifestyle. A win-win if you ask us!

Hold off on big purchases

If you’re eyeing up any big-ticket items, try and hold off until the economy softens. Instead, prioritise your emergency fund to handle any unforeseen expenses. It’s better to be prepared than scrounging for pennies. Plus, holding out for that big renovation or brand new car will only make the purchase more gratifying!

Ride the wave

Often, we can feel helpless against the state of the economy. Yet all of these seemingly small changes have the potential to add up to big financial gains. So, instead of surrendering yourself over to circumstance, take action and protect your finances! By sewing your seeds now, you’ll be able to reap the benefits long after the economy softens. 

Please contact us if you need more information on any of the matters in this article.