How to beat inflation and protect your future.

How to beat inflation and protect your future.

Cost, Of

The cost of living is on everybody’s minds at the moment, with many families seeing their weekly spend increase whilst wages stay the same.

Despite all the talk throughout the election on what the government would do to ease the pressure, economic factors like inflation and wages remain largely beyond their control – at least in the short term as they eventuated due to global factors.

The latest ABS figures showed household spending was 8.8 per cent higher in March this year than it was for January 2020, before the pandemic hit.

Whilst the hole in our wallets could be blamed on a number of factors, it’s worth noting the biggest increases in spending by category were health (up 24.2 per cent), clothing and footwear (up 19.5 per cent) and recreation and culture (up 15.0 per cent).  So, there is a large portion of this spending which us undoubtedly discretionary.

So, here are 10 ways that we can all make some adjustments that will ease the pain of inflation and keep us on track for a secure future.

  1. A big picture viewpoint – A change of mindset can be the first step to stemming the daily bleed of cash many of us accept as a given.  Thinking about where you want to be in 5 years time and what you will need to achieve your financial goals will help to determine how much you should be saving each week and how much you will have left to spend after paying yourself first.
  2. Buy now, pay now – don’t get sucked in to the pay later vortex.  Even if it is interest free here are still often account keeping fees and those purchases still have to be paid for sooner or later.  If you can’t afford it this month chances are you won’t be in any better position next month.  Think twice about whether you really need those new shoes, concert tickets or lounge suite.
  3. Unsubscribe – its easy to get caught up in the latest new thing and after a time find you are not really using it.  Cancelling just one subscription could save hundreds each year.
  4. Don’t blow it all at once – many of us fall into the trap of thinking we are flush when we receive our wages and go on a spending spree.  This is particularly so if you are paid monthly and find that all your money seems to fly out of your wallet in the first couple of weeks and by the end of the month you are scratching to survive.  Use separate accounts to divvy up your funds so that you can manage your cash better.
  5. Look for the cheapest options – simply refuse to pay the inflated prices for the things you need.  Shop around and you will find big variations in prices for everything from petrol to potatoes.  There are also many alternatives for your groceries.  You don’t need a $10 lettuce, try some cabbage instead.
  6. Make smarter entertainment plans – if you want a dinner out look for a restaurant that allows BYO or better still, plan a picnic.  You will probably find the food you prepare is healthier and yummier anyway!
  7. Review your services – shop around for the best electricity and gas deals, mortgage rates and check your insurances.  You could be saving hundreds of dollars with just a couple of phone calls.
  8. Consider park and ride options – especially if travelling solo.
  9. Plan meals in advance – it’s an easy predicament to find yourself getting to 7pm on a weekday with an empty fridge and seemingly no option but to order in.  Planning meals in advance and doing a weekly shop not only helps you buy in bulk, but reduces overspending by reducing waste and encouraging you to cook meals from scratch.
  10. Buy secondhand – fast fashion and other readily disposable goods are not only bad for the planet, they’re bad for our wallets. Buying second hand can put thousands of dollars a year back into your pocket and reduce waste at the same time.

With just a little more thought it is actually possible to stick to a budget if you pay yourself first and refuse to let inflation rob you of the future you want for yourself and your family.

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