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The easy way to defeat rising inflation

Invest in your budget

The easiest way to defeat inflation, or rather the effects of inflation, is to invest in your budget.

What I mean by this is to focus on your expenses - where your money is being spent - and then reduce that amount by at least the inflation rate. For example, if you're currently spending £1,000 a month and inflation is running at 5% reduce your monthly spending by £50 to £950.

The beautiful thing about cutting your expenses is that it's easy to do without having any real effect on your current standard of living. Yes, some expenses such as Council tax and mortgage payments are fixed but it is possible to reduce food bills, travelling expenses, entertainment, life's luxuries etc.

For example -

  • Turn your Central heating down a degree and use 1 hour less a day - that will be a significant saving. You can do it today - it will only take about 5 minutes
  • If you have a generous nature and always buy drinks or food for people, be 75% generous instead
  • If you regularly take a taxi, walk once a week or occasionally use public transport
  • If you spend £100 or more a week on groceries, it's easy to cut a basket of goods by 5%-10%, and again this takes almost no time or effort use this site to spot special offers before you shop
  • Similarly with holidays, you don't have to stay at home just choose a slightly cheaper resort, hotel or flight
Summary
Ultimately higher inflation is not hard to beat if you put a touch of effort into the problem. So follow some of the simple steps above and a high inflation rate will be a problem for others, not for you.

See also

FREE Stocks & Shares ISA Report
Why you must think long term with ISAs
Costs and charges - How to slash them
The best broker to use - and why
How to build a Portfolio of different asset classes
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