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Are you feeling the pinch at the moment? Maybe you’ve noticed that your basic grocery bill is getting higher or that saving money at the end of the month is getting more and more difficult? It’s not because you’ve been spending frivolously and not sticking to your budget, it’s because of inflation. When it comes to economics, inflation is one of the most important issues because it affects us all, no matter what we earn. Inflation is the rate of increases in the price of goods and services; meaning the higher the rate of inflation, the higher the costs of basics goods and services (like groceries and energy) we pay. The reason the inflation rate is important is that it shows how much prices have increased since the previous year – meaning how much more we have to pay. It’s also interesting to see the rate as most of us are not seeing our wages increase to keep up with inflation, so where things cost us more, we are not earning any more to balance out the price increase – so we really feel that things are far more expensive.
At the moment inflation is 2.3% more than last year, with the biggest rises seen in transport (the price of fuel is much higher than it was last year). Food prices have also risen by 0.3%. To try to combat these price rises there are subtle changes you can make that mean you can get the most for your money.
When it comes to saving, the current rates are very low, you’d be lucky to get back more than 1% on your money. But this doesn’t mean you can’t get a better deal. If you are saving to buy your first home or retirement, consider opening a Lifetime ISA (LISA). These are new savings accounts that have recently been introduced by the government which will give you a 25% bonus each tax year on everything you put into the account (up to £4,000 per year). There are certain rules around the account which you can read more about here.
This week has seen one energy supplier (EDF) raise their prices for the second time this year, putting up to 1.5 million of their customers at risk of a price hike. To make sure you’re always getting the best deal for your energy make sure you change your supplier as regularly as possible. It might seem like a big effort, but you could save yourself a lot of money in the process. Make sure you check your bills too as you don’t want to be paying over what you actually used. Get onto sites like uSwitch and Compare the Market to make sure you are getting the lowest energy prices available to you.
If you’re ready to spend some extra time looking for a deal, shopping around in multiple stores will guarantee you’ll get best prices. For instance, you can buy the majority of things from your local Aldi or Lidl and pop to Tesco, Asda, Sainsbury’s and Morrison’s for goods that you can’t get from your budget supermarket.
Also, think about doing your shop online. A good place to compare supermarket prices is mySupermarket.co.uk. This way you know that you are getting the cheapest price for your shop. Don’t forget that you can use your Monese card online to pay for your groceries!