Financial guidance
Understanding the impact of inflation
Inflation means that the general price of goods and services rises over time, reducing what the same amount of money can buy.
How it affects a household budget
Food, transport, electricity and other essential costs may rise at different rates. If income does not rise at the same pace, less money remains after essential spending.
Review your numbers before borrowing
- Use current expenses rather than last year’s amounts.
- Allow for expected debit orders and essential monthly costs.
- Check whether the repayment still fits if fuel, food or electricity costs rise.
- Compare the total repayment, not only the cash amount received.
Build a buffer where possible
Even a small emergency reserve can reduce the need to borrow for every unexpected expense. Review recurring services and direct any genuine savings towards priority expenses or a buffer.