Five tips to prevent inflation from triggering spending

The inflation has become one of the main concerns of citizens. The consumer price index (CPI) stood at 10.8% on an annual basis, according to the leading indicator of the National Institute of Statistics (INE). This is its highest level since September 1984, 38 years ago.

Faced with this price escalation, The European Central Bank raised interest rates by 50 basis points at the end of July. with the aim of curbing inflation, since its objective is to set the rate at 2% in the medium term. However, experts predict that it will remain high in the coming months, due to the energy crisis and the conflict in Ukraine. “Inflation will continue to be above the central bank’s target,” Lucía Gutiérrez-Mellado, JP Morgan AM’s director of strategy for Spain and Portugal, recently stressed in a presentation to the media. .

Citizens are struggling to make ends meet as the shopping cart becomes more and more expensive. The Organization of Consumers and Users (OCU) calculates that families will spend at least 500 euros more in the supermarket than last year. In addition to limiting the ability to spend, inflation means that savings lose purchasing power.

A citizen cannot stop inflation by himself, but he can do some measures to cushion the impact. We collect five tips so that the rise in prices does not lead to family expenses.

1. Review expenses: set a budget

Inflation can endanger the savings from a family. For this reason, the first tip is to review household income and expenses. When this information is already compiled, it is advisable to make a small budget indicating how much money you want to spend on each item (household expenses, transport, education, leisure, etc.).

Once a budget has been prepared, the family must continue to execute control of expenses incurred. This way you can get a more realistic picture of your financial situation and the impact of inflation. With this information, you will be able to take action on expenses, such as removing the subscription to that television platform that has not been used for months.

2. Plan your purchases: use several supermarkets

A very old trick to save money is simply to plan your purchases. When shopping, it’s a good idea to spend a few minutes before think about the meals that will be prepared in the next few days and what products are needed. Never go to the supermarket without a shopping list.

At the time of purchase, it may be convenient distribute the products between different establishments depending on the price. Moreover, now is the perfect time to replace branded products with white label products.

3. Take advantage of offers and enjoy loyalty

Another tip to prevent inflation from triggering spending is to Take advantage of offers and promotions. Some supermarket chains often offer promotions such as 3 for 2 or price reductions for products that are about to expire. Using these promotions can be a good idea to spend less.

It is also recommended obtain the loyalty card of the places where the citizen usually consumes most often. For example, the map of the supermarket, clothing store and restaurant chain where you go frequently. Using these cards usually involves applying discounts, which can help save money.

4. Reduce energy consumption: use public transport

Rising energy prices determine inflation. Even though can’t live without electricityYes, it is advisable to reduce energy consumption. One way to achieve this is to use low-power devices. For example, if you have enough money, it may be time to change an old appliance for one that consumes less power.

It is also practical use the devices that consume the most in the cheapest time slots. For example, don’t turn on the oven before 2:00 p.m. or turn on the washing machine at night.

Other actions that will relieve the pocket are to drive less and use public transport instead. In this sense, the government has approved a series of discounts on public transport between September and December. In the event that it is necessary to resort to the car, do not exceed 120 kilometers per hour to reduce fuel consumption.

5. Don’t leave money in the bank: invest

Faced with a situation of economic uncertainty, citizens generally begin to save for the unexpected. This was the case, for example, during the pandemicwhen families came to save almost a billion euros. However, leaving this money in the bank account is generally not a good idea.

If you want to avoid losing value, tap put that money to work. Once you’ve saved up an emergency mattress, it’s worth dedicating some of the monthly income to investing. Users who have never invested can find different products for new investors in the showcase entitled “Investing my first savings” of the Finect investor platform.

Similarly, it is also possible to use a financial advisor professional. These deal advise, design a financial plan and build an investment portfolio taking into account the profile of the user, the level of risk he is willing to assume and his financial objectives.

Know your investor profile

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