Price rises are inescapable and painful, as inflation has hit a 30-year high of 5.4 per cent. Yet small tweaks to how we manage our money can help combat inflation.
1. Sort out household bills
Some rising bills are inescapable, including energy, council tax and petrol, but not all are.
If you have not checked your broadband, mobile phone or insurance contracts for a while, there is a good chance that you are overpaying for these services. Insist on a better deal or switch.
Go through any subscriptions you have to see if there are any you can relinquish.
2. Switch your mortgage
Of all household bills, switching your mortgage is likely to be where you can make the biggest savings.
Homeowners can save £3,500 a year on average by remortgaging from a standard variable rate to a fixed-rate mortgage, according to lender Trussle. Fixing now will also protect you against future interest rate rises.
3. Invest your savings
There is not a single savings account that beats inflation. So, if you have savings that you will not need for at least five years, consider investing them instead.
A stocks and shares Isa is a good starting point, but make sure you opt for a level of investment risk you are comfortable with.
4. Change where you buy
The cost of everyday groceries is rising everywhere. However, analysis by consumer group Which? found that prices for a basket of everyday items has risen significantly more at some supermarkets than in others.
Prices rose 9 per cent last year at Waitrose compared with just 0.59 per cent at Sainsbury’s. So, shop around.
5. Get a pay rise
Easier said than done, you may say. But, you might have more bargaining power than you realise. Your employer may be keen to keep you happy if you are harder to replace than usual because of a robust jobs market. Annual pay growth is hovering at about 4 per cent. Not enough to beat inflation, but it goes some way to mitigating its effects.
Rachel Rickard Straus