How to remain financially stable during inflation
The cost of living is set to grow in the UK in 2022. The Bank of England has warned that inflation could rise above seven per cent this year. Meanwhile, energy and fuel prices are rising: roughly 18 million households on standard tariffs will endure an average increase of £693 – from £1,277 to £1,971 per year. But how can you remain financially stable during this time? Read on to find out.
Budgeting should be one of the first steps you take when you need to look after your money. Set up your budget by working out all your outgoings for the month – this should include your bills and shopping. Then, compare your outgoings to your incoming salary after tax. Try and ensure that your incomings are larger than your outgoings, enabling you to grow your savings each month.
Save money on motoring
Saving money on motoring can help you deal with the costs of inflation. For a start, you should shop around for the best fuel prices – this can be a little hassle, but once you’ve found a competitive pump, you can save plenty of money. On top of this, if you have a particularly high-end car then you can save money too. For instance, if you have an Audi, you can get Audi gap insurance to protect yourself from any large, unexpected bills.
Save money on the household shop
Saving money on the household shop can also help you remain financially stable at this time. This just takes some careful preparation. Write out your shopping list beforehand and try to focus on the essentials. Once you have your list prepared you can shop around for the best deals. Ideally, you’ll incorporate this into a wider budget so that you know exactly how much you can spend on your shopping without putting yourself under financial pressure.
Build up your savings
Savings are important. If you find yourself in a perilous financial situation, your savings can help you cope and remain solvent. Plus, savings can help you achieve long-term goals such as buying a car or a house. Ideally, your savings will equal at least three to six months of your earnings to insulate you in times of unemployment. You can build your savings by putting aside money each month from your incomings. Just ensure that you actively grow your savings, be it through an ISA or investments.
The latest news about the cost of living can be worrying. But by looking after your savings, setting up a budget and saving money on shopping and motoring, you can put yourself in a position to remain financially stable.