Best Tips To Protect Your Savings From Inflation

The economic situation at the moment is fluctuating all the time and the threat of inflation is an ever-present issue. Of course, inflation isn’t necessarily a bad thing. When prices go up, businesses often need more workers, and that means higher wages. Government benefits may also attract cost-of-living increases. But a lower rate of inflation leads to a lower interest rate, and that means if your money is in a savings account, it’s much more difficult to earn a high yield. 

It’s impossible for you to control inflation, however, there’s no need to allow it erode the money you’ve saved. If you’re sensible about where your money is put and watch your expenses, you should find that you manage to have inflation protection and minimize any damage caused by inflation. 

If you have savings, you’re probably worrying about how you can best protect your money from rising prices, so below are a few top tips that will help you keep your savings safe. Before we get into the tips, if you want to save money on your next shopping, make sure to check Latest Deals. Their website offers hundreds of new deals daily with the most influential retailers in the world. You will be able to save money and take home a bargain.

Look For The Best Interest Rates 

Experts say that everyone should try to have enough money in savings to cover all of their living expenses for at least six months in an emergency fund. You should keep this money in a savings account that offers instant access so it can be instantly withdrawn as and when necessary. Of course, all savings accounts have their own interest rates, so you need to shop around and make sure you’re getting the very best deal for your money that you can. If your savings amount to a significant sum, even a small interest rate difference can have major impacts on the amount of interest you can earn. The most cost-effective savings accounts are currently earning about 0.40% as an annual percentage yield – far more than today’s average rate which is just 0.17%. Make sure that you’re regularly adding up how much you spend each month too. As inflation rises, so does the cost of living, so you need to make sure you have enough for six months’ expenditure in your savings account to cover your increasing living costs. 

Move Your Long-Term Savings To Equities 

If you have significant amounts of savings, consider moving some of your money into investments that have the potential for greater long-term growth. Once you’ve set aside sufficient money for an emergency fund, the remainder could be put into equities which have, historically, been the most effective form of investment for beating inflation in the long-term. 

Choose Wise Investments

If you’re considering investing your savings rather than keeping it in a bank account to beat inflation, there are some other options as well as equities. Bond funds are one option that you may wish to consider. They pay interest at a fixed rate during their lifespan, and when they mature, the original amount of capital is returned. If you choose bond funds as your investment of choice, you may be reassured that they are invested in numerous securities in order to spread the risk. 

Get Some Expert Advice 

Seeking advice from a financial adviser is always a wise course of action when considering what to do with your money to achieve the best rewards. You can use this Motley Fool discount to get the information and guidance you need. Investments are often the best way to protect your savings from inflation, but you need to be sure you’re adopting a sensible strategy that involves holding a broad spectrum of assets. Taking professional guidance is the best course of action for inflation protection and to make sure your savings are as protected as possible from the fluctuating financial situation and best placed to give you peace of mind in the future.