INFLATION RATE HIKE: WHAT TO DO WHEN PRICES GO UP
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Everyone’s scared of inflation. It’s pushing up the cost of living and interest rates, and it gives many the fear that we will not be able to afford things like basic necessities anymore.
What you need to do
There are lots of methods to protect yourself against inflation that range from lowering your expenses to reconsidering your investments.
For the last 10 years, I’ve come across people who would come to me to try and increase their wealth but basically be capped out in the money they can borrow. Usually I would give some very simple advice like “you need to earn more.” This is not the time for that. Don’t get me wrong. I think with change comes opportunity.
But a lot of people are going to get hurt by rising inflation.
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1. Stop spending so much.
- Avoid insignificant purchases like takeaway food and Uber Eats. I see people’s bank statements all the time and I can tell you that most people who are overspending here do not realise how much they are actually spending and would be shocked if they knew the figure.
- Do your supermarket shop in one go and prepare a list of the things you need to buy instead of just picking everything you see in the grocery so you can better keep track of your spending. If you are the type of person who goes to the supermarket 10 times a week–you’re probably over spending.
- Negotiate your utilities from your current providers to find ways to lower your bills on your mobile phone, streaming services, internet, gas and electricity.
- Sort out your debts. Consolidate. It’s a sensible financial strategy especially if you are overwhelmed with credit card payments. The interest rate on debt should decrease as a result of consolidation, resulting in a lower monthly payment.
2. Stop living with only a couple of weeks cash on you.
- No more afterpays, zippays, or the likes. It will slowly crush you. Start money management to avoid living week to week or month to month.
- Gain the ability to delay gratification. It is beneficial to deposit money into a savings account regularly to develop healthy financial habits.
3. Be smarter with your spending
- After a long week at work, it is tempting to go out and spend a small fortune on dinner and drinks. I get it–you’ve got to unwind. If money is tight, then maybe consider how often you are doing this as it’s going to punish your bank account.
- Prioritize your most vital expenses, such as rent or mortgage, food, and education fees, among others. If you haven’t reviewed your utility bills, you’re probably paying too much there too. Make sure you’re paying more than the minimum amount for your credit cards or house loan.
- It may be possible to refinance your existing home loan – that’s where my expertise can come in. If this is you the team here at Will Bell Mortgage Broker would be happy to help.
Inflation is just one of the major problems everyone is facing. We have a global food shortage about to start. We have energy problems. We also have expensive food like lettuce being $10 at the supermarket.
Now, whether your income has been affected by the current inflation or not, it’s essential to always stay smart about your household budget. After all, you don’t know what will happen in the future, and it’s always a good idea to be financially prepared for the worst.
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