Five tips to help your money beat inflation

14th January 2014

Online investment management service Nutmeg has suggested five ways for consumers to beat inflation. Nick Hungerford, CEO and founder of online investment management service Nutmeg, says that while this week’s figures indicate a small improvement in the rate of inflation, there is still a long way to go.

“The effect of rising energy prices has continued to make its mark and only now have we achieved the Government’s 2% target after four years of difficulty. We’re on the road to economic recovery, but it’ll still be a long time until households feel the benefit in real terms and this is particularly true for savers, who are also faced with the prospect of low interest rates throughout 2014”.

He suggests five ways to beat inflation.

1.    Know your numbers. Keep track of the monthly inflation figures so you know what you need to beat in order to see your money maintain its value and, hopefully, grow.

2.    Shop around. If you’re more comfortable with a fixed-rate savings account than an investment portfolio, don’t settle for the first one you see, or go with a big brand name just for the sake of it. Do your research to find the best deal for you.

3.    Remember, investing isn’t just for the super-rich. These days, you can start a portfolio with just a few thousand pounds and by adding small monthly contributions you’ll soon see your investment pot grow. Again, explore all investment opportunities out there to see what’s most appropriate for you.

4.    Think long-term. If you’re new to investing, it could be foolish to try to beat the stock market through day trading. You might end up in a real mess. Look at your financial objectives, set an investment plan with a timeframe of at least five years and stick to it, only reviewing your investments as your life circumstances significantly change.

5.    Increase your income. On the other side of the coin, you can of course improve your spending power in times of high inflation by increasing your household income. It’s easier said than done, but it’s a good time to benchmark your salary against industry averages, know how to negotiate a rise and consider sources of a secondary income.

1 thought on “Five tips to help your money beat inflation”

  1. John Bull says:

    A useful reminder that everybody has to be an active saver and investor and can’t sit back and rely on either a fund or simple savings. Increase your income – ahh we’d all like to do that :)

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