November 11, 2022 | 8 min read
Summary: We look at some of the ways you can offset inflation by continuing to invest, increasing your income or reducing expenses.
Between March 2021-22, inflation in Australia rose by 5.1%. Meanwhile, wages only rose by 2.4%1.
With the bare essentials becoming – well, expensive, it’s not surprising that many people are looking for new ways to save money or increase their income.
The good news is there are steps you can take—and actions to avoid—that can help you navigate this period of high inflation, for however long it lasts.
In this article we look at some of the ways you can offset inflation by continuing to invest, increasing your income or reducing expenses.
Here are some of the best ways to manage rising inflation:
Investing a portion of your income is one way you can keep up with, or even outpace, inflation.
While rising interest rates or falling sharemarkets may cause many people to second guess themselves when making investment decisions, it’s important to stay focused on your long-term goals and avoid being influenced by short-term market volatility.
Having a diversified investment plan—money invested across many asset classes and in many industries—will help to cushion you from major sharemarket falls.
Shopping around for the best deals on your home loan, electricity and insurance, can end up saving you hundreds of dollars over the long-term.
You may also want to consider cutting down on subscriptions or memberships you don’t use, and make sure you’re getting all the concessions you’re entitled to such as rebates and pensioner discounts.
Official interest rates are predicted to continue rising throughout the year, so if you have a home loan that isn’t on a fixed interest rate, you’ll need to factor in increased repayments to your budget.
Consider using some of these energy saving tips:
While food might be a necessary expense, there are ways to save without compromising quality.
Meal planning is a simple way to get better at grocery shopping to reduce wasting food. You could also consider finding recipes that use the same ingredients as you’re more likely to use up an entire bag of vegetables or a fresh bunch of coriander.
You may also want to consider growing your own vegetables.
While we can’t control global oil prices, you can plan clever ways to reduce costs.
Request to work from home a few days a week
Ride your bike to work and get the benefit of a good workout
Use public transport – if you live in a city or town with a decent public transportation system, this alternative is a great option to cut down on commuting costs
Carpool – if you have colleagues who live in the same area, you could split the driving between you.
Although there isn’t always a quick or easy way to increase your income, there are options for earning extra cash to cover more immediate expenses.
Passive income is a great way to earn money with little effort.
You can also find an extra source of income outside of your 9-to-5 job by:
Lastly, while it may not be easy to increase your pay overnight, you could consider ways to use your job performance and rising inflation to get a promotion or salary increase.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.