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  • Writer's pictureKel Galavan

What is inflation, and how can you protect your money from it?

Inflation is a word that gets tossed around a lot, but what does it mean? Inflation is the rate at which the general level of prices for goods and services rises. This means that over time, the buying power of your money decreases as prices go up.

You work hard for your money. You juggle many responsibilities and would like to keep as much of your income as possible. Unfortunately, inflation can eat into your savings. But don't worry – there are ways to help you fight the effects of inflation and keep more of your hard-earned cash. Check out these tips below!

Inflation is everywhere

Inflation is the bane of any economy and lately doesn't seem to be abating soon. According to the ESRI and Central Bank, the annual inflation rate is expected to peak at 8% this summer and average at 6% for the year. That's well above the general inflation target of 2%, which means that prices will start rising faster than wages. If you're a saver, inflation can eat away at the value of your money. There is a positive side effect. If you're a borrower, inflation can work in your favour by reducing the actual value of your debt. Either way, it's something to keep an eye on in the months ahead.

Inflation is new to this generation

For anyone who started earning from the mid-2000s onwards, their experience of inflation has probably been relatively limited. For much of the last decade, aside from rent increases and the occasional increase in public transport costs, inflation has been almost non-existent, historically low in fact. This is in stark contrast to the inflationary experience of the present. We're seeing regular price hikes on everything from food and fuel to clothes and energy. This means that for anyone who started earning during this period, their inflation experience is likely to be very different from their parents.

Energy costs are the primary driver of inflation.

Every time we turn around, our energy prices go up again. Whether it's electricity, natural gas, or propane, the providers constantly increase their rates. And while they may claim that rising costs are unavoidable, the truth is that there are ways to fight back against rising prices. By negotiating with your current provider, or investing in energy-efficient appliances, you can help to keep your energy costs under control. So don't just accept rising prices as a fact of life - take action to keep your energy bills manageable.

Get switching energy providers

The energy market is a funny old thing. Prices always seem to be going up, but there are ways to keep a lid on things. For example, many energy providers offer discounted rates to new customers as an incentive to sign up with them. So, if you're stuck on a high tariff and the end of your contract is coming up, it's worth shopping around and seeing what else is out there. Of course, you might not be able to avoid energy price hikes altogether, but you can certainly give yourself a fighting chance by switching providers regularly. Who knows, you might even save yourself some money in the process!

Measure your energy use

If you're a night owl who doesn't mind doing some domestic duties into the small hours, it might be worth considering a Night Saver meter. This works by charging a lower rate for electricity used after 11 pm (or midnight in the summer months) up to 8 or 9 am, depending on the year. Night Savers are especially beneficial for those who use electricity for heating or have electric cars that they can charge at night. Typically night time is when rates are at their lowest. So if you don't mind doing your laundry or vacuuming in the wee hours, a Night Saver meter could help you save money on your electricity bill. Alternatively, and much easier option is to just set the timer that's available on most modern appliances.

Savings on night rate electricity

Electricity consumption is highest during the daytime when everyone is awake and using appliances. However, the benefits to consuming electricity during off-peak hours, when electricity is cheaper ( assuming you have a nigh saver metre installed in your home). According to estimates, more than 30% of the daily electricity usage in a house would have to be consumed during these off-peak hours to make it worthwhile. The night saver is considered most suitable for homes with electric storage heaters, electric car chargers and heat pumps. By focusing energy use during off-peak hours, households can save money on their electricity bills.

Get smarter with energy use

It seems like everything is getting smarter - including our home appliances. One of the latest additions to the smart home revolution is the smart meter. These devices are being rolled out to premises across the country, and they offer several benefits over traditional meters. They provide more accurate readings, which means you can better estimate your energy usage. They also allow you to monitor your usage in real-time to make changes to conserve energy and save money. Plus, with smart meters, estimated readings will become a thing of the past.

Go electric when driving

For two-car households (with petrol or diesel powered motors), the burning question is should you continue burning those increasingly pricey fossil fuels? As electric cars become cheaper to buy and charge, many people switch to electric power. Electric power is more environmentally friendly, but it's also cheaper to maintain in the long run. Electric cars don't require tune-ups or oil changes, and their brakes last longer because electric motors generate no friction. As a result, electric vehicles can save you money on maintenance and fuel costs. In addition, electric cars are becoming increasingly stylish, with many major automakers releasing new electric models in the past few years.

One big area where electric cars have an advantage is in the cost of charging. Although the ESB recently announced some increases in the price of public charge points, the cost of an entire charge would still be cheaper than the cost of a fossil fuel alternative. This is just one of the many reasons why electric cars are becoming increasingly popular, and this trend will likely continue in the years to come.

Save on your mortgage.

Homeowners are always looking for ways to save money, and one of the most obvious places to start is with their mortgage. There has been a growing trend of mortgage holders switching providers to get a better deal in recent years. And it's no wonder why: by shopping around, homeowners can potentially save thousands of euros in interest payments over the life of their loan. Moreover, with interest rates at historic lows, now is ideal to lock in a low rate. Of course, switching mortgage providers is not without its challenges. Homeowners need to be mindful of exit fees and other costs associated with breaking their contract. But for those who are willing to do their homework, switching providers can be a great way to save money on their mortgage.

Mortgage rates are changing

In saying that, it looks like mortgage rates are rising, with several providers are already increasing their fixed rates for new customers. Other providers are expected to follow suit in the months ahead. This means that now is an excellent time to consider fixing your mortgage rate if you want to lock in a low rate for the long term. Fixed rates can now be availed of for up to 5 or 7 years for as low as 2%. So don't wait for ECB changes to fix, or you may have missed the opportunity for lower repayments. Mortgages could become more expensive in the months and years ahead, so it's wise to lock in a low rate now while you still can.

Bank fees

There are a few types of structures that banks use for bank fees. Some banks charge a flat fee structure, where you pay one set fee regardless of how many transactions you make. Other banks have a ‘per transaction fee’ or a lower flat rate and lower charges for individual transactions. Over time, the latter can add up, but it all depends on your banking habits.

For example, if you're someone who only makes a few transactions per month, then a per transaction fee structure might be better for you. But if you're someone who uses their bank account frequently, then the flat fee structure could be cheaper in the long run. Ultimately, it's essential to compare different bank fee structures before deciding on an account to choose the best one for you.

It's worth shopping around for a bank that better suits your needs. Bonkers. i.e. is a great resource for comparing the fees charged by different banks. According to their calculations, you could save up to €100 a year by switching to a bank with lower fees. So if you're fed up with high bank fees, why not head over to Bonkers. i.e. and see how much you could save?

Car Insurance

For years, the cost of car insurance has been on the rise, making it increasingly difficult for drivers to keep their vehicles on the road. However, there was some good news in the most recent inflation figures, as the cost of motor insurance dropped by 12% in the year to March.

But premiums had risen substantially in the years leading up to that. So this is a welcome relief for drivers who have been struggling to keep up with the rising costs. While it is still too early to say whether this is a trend or a one-off event, it is undoubtedly a step in the right direction. Let's hope that this decrease in car insurance rates is here to stay.

Health Insurance

The health insurance market has been very competitive in recent years, with several providers offering significant discounts on premiums. However, it is essential to remember that not all health insurance policies are the same, and it is necessary to compare policies before deciding which one is right for you. The VHI has announced a new tiered rebate system, which means that customers can save up to €300 on their health insurance premiums. This is in addition to the once-off rebate of the state health insurance levy announced by the Health Insurance Authority last year. So, if you're looking for health insurance, be sure to check out VHI's new tiered rebate system and compare to other options on the market.

Food Prices

According to the UN Food and Agriculture Organisation, food prices have risen at the fastest pace in 14 years. The food price index reached a record high in March, with meat, dairy, and cereals seeing significant increases. The main drivers of this inflation are higher fuel prices, which have led to increased costs for transport and agricultural production. The weather has also played a role, with prolonged droughts in Australia and South America affecting crop yields. This has had a knock-on effect on global food supplies and ultimately on prices.

As a result of these factors, the cost of food is likely to rise in the months ahead. This is terrible news for consumers, who contend with higher grocery bills. It is also expected to exacerbate existing levels of food insecurity worldwide.

Know where the best deals are on the food shelves

Food prices have been on the rise in recent times, but there are some things that shoppers can do to offset some of the increases. For example, supermarkets tend to place their higher-yielding and more expensive items at eye level. The cheaper products are often on the top or bottom shelves. Another helpful tip is to shop by comparing the price per unit rather than just going on the price. By following these simple tips, savvy shoppers can keep their food budget under control.

Put extra cash to work.

Total household deposits in Ireland stood at a whopping €136 billion at the end of last year, with over €11 billion added throughout 2021. This is a record amount of money saved, likely due to the pandemic. With so much uncertainty in the world, people are naturally more inclined to save money instead of spending it.

And with interest rates staying low for the moment at least, there's less incentive to keep money in a savings account. However, people are saving more during these difficult times is a positive sign. It shows that we can make smart financial decisions even when things are tough. And who knows, maybe this extra money will be used once the pandemic is over.

Investing can be a great way to grow your wealth over time. However, it's essential to choose the right investment vehicle for your needs. If you're looking for low-cost options, exchange-traded funds (ETFs) can be suitable. ETFs offer the advantage of diversified risks and regular rebalancing, which can help ensure that your risk tolerance is met. Plus, they tend to have lower costs than other types of funds. If interest rates are on the rise, paying off debt may also be a good use of spare cash during an inflationary period.

Ultimately, there is no one-size-fits-all approach to investing; it's vital to evaluate your goals and risk tolerance before making any decisions.


So what can you do to try and keep more of your hard-earned money during times of inflation? Well, thankfully, there are a few things. Firstly, always be on the lookout for good deals and special offers – retailers are often more willing to negotiate when it comes to price. Secondly, consider buying in bulk where possible; this will save you money in the long run, but it could also mean fewer shopping trips. Finally, make sure you're getting the most from your current bank account or credit card – shop around for products that offer reasonable rates of interest and no fees. Inflation is unlikely to go away any time soon, so it's essential to take whatever steps you can to

I'll be sharing more money-saving tips and money mindset tips with you soon, so stay tuned! In the meantime, make sure you are subscribed to the Smart Money Times Newsletter for news and a deeper dive into getting ahead with your money.


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