With the soaring cost of living, it’s fair to say everyone has had to tighten their purse strings recently. If you’ve purchased fuel or groceries lately, you’ve probably noticed they cost a lot more than they used to. The Central Statistics Office (CSO) estimates that prices have risen by 9.5% this year, as of October 2022. 

The cost of living has been heavily impacted by rising food and energy prices. The COVID-19 pandemic, Brexit and the war in Ukraine have all had a significant impact on supply chains around the world, contributing to a rise in the cost of essential and non-essential goods and services at home. 

But there are steps you can take to make it easier for you to navigate the current cost of living crisis and help protect your finances in the year ahead. Like getting a free online financial review for a clear picture of your overall finances, with steps you can take to help protect your finances. 

Get a free financial review online now to take the first steps. 

Now, let’s look at what inflation really means. 

What is inflation?  

Inflation is a term used to describe rising prices. It refers to a broad increase in the cost of goods and services over a period of time. It can also cause the value of money to drop. In simple terms, this means you can buy less for €1 today than you could before inflation occurred. 

What does inflation mean for your finances?  

Higher prices mean your money needs to stretch a bit further than it used to. Day-to-day expenses like heating your home, filling the fridge and running a car now cost more than they did a year ago. But chances are your income hasn’t increased at the same rate. You may be spending more on the essentials, leaving you with less money at the end of the month than you would’ve had before. However, there are a few things you can do to help protect your finances from inflation.     

Top tips to help you manage the increased cost of living 

The cost of living crisis impacts all of us in some shape or form, but these tips can help you manage increasing prices and make the most of your money.   

1.  Make a budget 

A budget can be a great financial tool to help you plan and manage your finances, regardless of the economic climate. If you don’t already follow a monthly budget, now could be a smart time to make one.  

Having a budget can help you see how you spend your hard-earned money from month to month. You can keep track of your finances and make budgeting a little bit easier using the 50/30/20 rule.  

The 50/30/20 rule is a budgeting rule that recommends you spend 50% of your income on essential items like food and rent or mortgage payments. Then you can spend 30% on your wants, like dining out with friends and family and keep aside 20% for your savings or emergency fund.  

Although inflation may mean you have less money at the end of the month, following a monthly budget can help you spot ways to curb your spending and reduce costs in certain areas.  

2. Listen to the finance experts 

In times of high inflation, it’s wise to listen to the experts. You’ll find great resources on sites like Citizens Information, which is government-funded, or the Competition and Consumer Protection Commission (CCPC) which enforces consumer protection law in Ireland. They provide impartial advice and information to help you manage your money and cope with the cost of living. 

You can also chat with an Irish Life financial advisor for free support and advice on your protection, retirement, savings and investments needs. Fill in the form at the end of the page to book an appointment and start your year off right. 

3. Review your subscriptions 

Did your budget highlight a couple of subscription services you’d forgotten about? With automatic payments, it can be easy to forget how many subscriptions you pay for each month, but they all add up. Make the time to review every subscription and consider if you still want all of them. Maybe there’s a streaming service you don’t use often enough to justify the cost. Cancelling the ones you don’t use could be a great place to save €20 or €30 a month and cut back on spending. 

4. Reconsider your energy provider (and invest in energy-efficient appliances) 

As of October 2022, household energy bills have nearly doubled across Europe in the last year, according to data from the Household Energy Price Index. As energy providers in Ireland continue to raise their prices, it may seem like there’s no avoiding eye-watering heating and electricity bills. But there are steps you can take to reduce your monthly costs. 

Check out the competition 

Just like you shop around for the best deal on your car insurance, why not do the same with your energy bills? If your current provider isn’t offering you a good deal or incentive to stick with them, check out the competition. You can use third-party comparison sites to help with your research and identify a potential new supplier. 

Be more mindful of your energy consumption 

While it may seem obvious that using less energy at home will result in lower household bills, we often forget just how much our energy consumption is impacted by our daily habits. Do you heat the house while no one is at home? Leave appliances plugged in when they’re not in use? Or keep the fridge door open while you wait for mealtime inspiration to hit?  

We’re all guilty of seemingly harmless habits like these. But did you know it takes 45 minutes for the fridge to cool down to its original temperature for every 10-20 seconds the door is open? That’s a lot of wasted energy. Where possible, try to be more mindful about your heating and electricity use. It could go a long way in helping to reduce your energy bills. 

Consider energy ratings 

If you’re planning to replace your washing machine or it’s time to get a new kettle, it’s a good idea to compare the energy ratings of new products on the market before you buy. These ratings can help you identify products that are more efficient and cost less money to run. Look out for A-rated appliances which are the most energy-efficient and, where possible, avoid G- rated appliances as these are the least efficient you can buy. 

5. Make smarter shopping decisions 

When it comes to shopping, there are quite a few ways you can save money: 

Shop secondhand 

Secondhand items are often significantly cheaper than their brand-new counterparts, and with the rise of resale sites, it’s never been easier to nab a bargain.  

Before you splurge on new clothing, furniture, books and even electronics, check if someone is selling the item that you’re looking for online or at your local secondhand store. You can also sell items you don’t need anymore if you're looking to earn some extra cash. 

Shop for groceries in the evening 

Did you know that supermarkets often discount their produce just before they reach their sell-by date? Plan to do your next weekly shop at the end of the day and you’ll likely find an array of fresh food at reduced prices. Keep your eyes peeled for the discount stickers or ask a member of staff if there’s a particular aisle where they keep the reduced products. 

Sign up for loyalty programmes 

Does your favourite shop run a reward scheme or offer loyalty cards to regular customers? These are a savvy way to cut costs if you frequently shop at the same places. Retailers and even some clothing stores on the high street run loyalty programmes that allow you to earn points every time you buy. These points are then converted into vouchers and deals you can use the next time you shop. 

6. Drive less, cycle more 

With the price of petrol and diesel at record levels, many people are choosing to leave the car at home in favour of cycling. That’s not to say you should get rid of your car, but by reducing the number of times you use it you could save a significant amount on fuel. And with the added incentive of the government’s Cycle to Work scheme, which can help you claim a tax-free bike through your employer, there couldn’t be a better time to make the switch from four wheels to two. 

7. Consider investing 

There’s no denying that the current cost of living in Ireland has made it harder to save, but if you do have extra money at the end of the month, you may want to consider investing it. Inflation reduces the purchasing power of money over time, which means cash in a savings account is vulnerable to losing value. So, if you’re planning to save money for the future, investing could provide a better return. Before you make any decisions, talk to one of our advisors about your financial situation and attitude to risk. They can recommend investment plans suited to your needs and goals. 

8. Get a free financial plan 

When dealing with the stress of the rising cost of living, finding the headspace to even think about your long-term finances can be a challenge. A personalised financial plan can help you prioritise your money, from ensuring you have cover if you cannot work due to illness or injury while you are employed, to making sure your family is protected if you die. 

With our Digital Advice tool, you can get a personalised financial plan generated in minutes. Your financial plan includes recommendations in relation to your life insurance, savings and investment options and recommends the next steps to take. 

How Irish Life Financial Services can help 

We’re all feeling the pinch of the cost of living, but try not to let inflation get the best of your finances. Follow the tips above to help you manage your money as best you can. You can also book an appointment with one of our financial advisors. Pick a time and date that suits you, and an advisor will call you back to discuss your current financial situation. They can provide you with trusted advice on your protection, savings and investment needs and help you build a full financial plan for the year ahead.