It was recently announced that inflation has reached its highest level in 16 years. CPI inflation reached 4.4% in July, up from 3.8% in June, and already exceeding many economists’ predictions for total annual inflation.
Even more worrying are the alternative figures: RPI inflation (which measures mostly the same things as CPI, but includes mortgage & housing costs) reached 5% in July, and the latest figures from The Telegraph’s RCLI (Real Cost of Living Index), which attempts to measure the rise in essential living costs to the average consumer, measured inflation at 10.8% in July.
The news may be a particular worry to people struggling with debt, as rising inflation adds further pressure to the existing worry of rising utility prices and a volatile housing market.
For that reason, it’s important that you assess your financial situation, and don’t let rising prices send you into a downward spiral of debt.
Re-assessing your costs
Re-assessing what you are spending (and where) can help you cope with fast-rising inflation. Many people simply accept the price rises without questioning them – and for some staple items, there is no way around that – but combined with ever-growing costs of living, more and more people are finding themselves falling into debt.
With that in mind, it’s very important to make sure you are protecting yourself as well as possible. Consider trying to cut costs by changing your buying habits, or even simply changing some of the items you buy, or services you use.
For example – how often do you buy products because they are the ‘best’ brand? For that matter, do you know what the ‘best’ brand is, or just the most well-known brand? By going for the lesser-known brands from time to time, you can help to lessen the effects of inflation on your finances. And who knows – you may even like the other brands more.
Likewise, it’s important to make sure you’re getting the best value for money at home, too. Many people pay more than they need to for home utilities (gas, electricity, broadband etc.) because they haven’t shopped around. There are many facilities online for comparing and contrasting prices, so make use of them, and you could free up some extra money each month.
It won’t last forever
Stay optimistic. The economy is going through a rough patch at the moment – but history tells us that we are at the lower end of an economic cycle, and things will pick up again after a while.
Until then, though, it’s essential that you do what you can to protect yourself. And if you do find yourself struggling with debt, you should contact an expert debt adviser, who will be able to discuss your situation and help you find the best way out of it. for more information visit the site Debt Relief Services and for free iva information visit IVA Information
Tuesday, October 14, 2008
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