Last Updated on Thursday, 21 December, 2023 at 9:13 am by The Malta Business Weekly
Ingrid Micallef is Head – Products & Marketing at MeDirect
As we head towards a new year, it seems that the pressures of inflation are easing a little – at least for now. That said, your purchasing power is likely to have declined over recent months. In this environment, you may be tempted to save less, stop saving altogether or even start spending money you have already saved. But this strategy will only compound your declining spending power in the years ahead. To counter this, here are some tips which can help you deal with the longer term impact of inflation and keep saving for the future.
Review your spending
It’s amazing how much money we waste. Take a look at where you are spending yours and see what cuts you can make without drastically impacting your lifestyle. Simply changing the shop we buy our groceries from or cutting out subscriptions we never use can save tens if not hundreds of euro. This money can then go towards other essentials, enabling you to continue saving. It also makes sense to create a budget for all the things you know you need so you can stay in control of your spending.
In addition to spending your money more wisely, it also makes sense to focus on reducing or eliminating some of your debts, especially high interest ones like credit card debt. Making the effort now to pay off these debts will, once again, leave more money in your pocket and avoid having to dip into your savings accounts.
Pay yourself first
Greater discipline with managing your money can also be extended to how you save. If not the case already, make sure your savings happen automatically. Decide how much you want to save and make sure that money is transferred into a dedicated account at the start of the month. That way you won’t notice that it’s gone and you won’t be tempted to spend it as the month draws to an close.
Ask for a pay rise
This strategy could come with some risk, depending on your employer, but the truth is that many employers have been finding it hard to fill all their vacancies. Of course, employers are also facing the reality of inflation which in many cases is eating into their margins but there’s no harm in having an honest conversation about the challenge of making ends meet and seeing if it’s possible to improve your earnings.
Make your savings work harder
It’s important that you make sure you are earning as much as you can from your savings. Shop around for higher interest rates, especially on fixed term deposits and keep an eye out for how savings accounts pay interest. If you are not keen on tying up your money for long periods, MeDirect is currently offering 3.40 per cent per annum on a 6-month term deposit. There’s also the option of opening a MeMax instant access savings account, which offers 2 per cent per annum interest, paid monthly. The more interest you are able to earn, the more you will protect the purchasing power of your savings.
MeDirect Bank (Malta) plc is a participant in the Depositor Compensation Scheme established under Maltese law. Terms and Conditions apply and are available upon request.
Term deposit rate quoted is gross of tax on a per annum basis. Interest is paid into a savings account. Accounts can be opened with a minimum of €100 and deposit must be kept in the account for the duration of the 6 months.
The MeMax Savings account is available in Euro and rate quoted is gross of tax, paid on a monthly basis and is compounded. Account holders can deposit up to €2,000 per month up to a maximum account balance of €50,000.
MeDirect Bank (Malta) plc, company registration number C34125, is licensed by the Malta Financial Services Authority to undertake the business of banking in terms of the Banking Act (Cap. 371).