With the cost of living rising and prices increasing in every sector, we have been receiving questions from several of our clients about how best to combat inflation.
Bring in more money
For business owners, you should be evaluating increasing costs of production, labour and overheads and then adjusting your prices accordingly in the form of an increase in your sales prices. This is inevitable and necessary to survive in an inflationary cycle.
Evaluate your cost efficiencies
Again for business owners, you need to review your business operations and see where you should be saving. Perhaps some processes can be streamlined or removed. Reviewing your business operations will highlight where cost inefficiencies are occurring.
Pay less tax
Working with your advisor throughout the year can help you reduce your overall tax payable. It is easier to review a plan more regularly during the year, rather than scrambling to try to reduce your tax when it is due.
Use technology to your advantage. There are so many tools and processes that can now be automated and this in turn should reduce labour costs.
Consider what types of insurance you have. Having the right cover of insurance is essential.
Too many times we see our clients have duplicates of life insurance and trauma insurance, over insuring, insuring for things that no longer are relevant and so forth. For personal insurance, it is best to consult with a Financial Planner to ensure you have the right coverage for your specific circumstances.
Interest rate review
Similar to insurance, you should be reviewing interest rates on loans. With rates expected to continue to rise, if you haven’t looked at refinancing in the past few years, now might be the time. You should also consider where the security lies on your loans as this can affect bank risk and therefore your interest rate. Consulting with a broker will help you reduce risk and find the best rate.
Remove unnecessary subscriptions
Review your spending and see where costs can be eliminated. Many subscriptions are so low that we do not notice them or think they make much of a difference, but removing several of them can make a big difference in your budget.
Spend money where you have to
Costs are increasing for everyone. Be mentally prepared that some things are going to cost more than they used to.
TIP: Don’t make rash decisions and cut costs on items or services that are valuable to your well being and financial future. In turn be more proactive in dealing with luxury overspending.