As a consumer, I consider inflation to be a dirty word. After all, it always signals that the value of my money is about to shrink.

So when I read the headlines that inflation has been going up since January and that it hit a record 5.2 percent in June – the highest level in 5 years – I took out a notepad and started to review my expenses. I suggest you do the same.

Inflation can be simply defined as a general increase in prices over time. The sharper the rise of the inflation trend, the more the everyday consumer will hurt.

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With inflation, you will see a decrease in the amount of goods and services you can buy with the same money in the future. So when you hear the elders say “in my time, a haircut only cost P10”, that is probably true as their P10 decades ago held the value of your P500 today (which is what your barber or stylist likely charged you in June).

Worse, inflation not only affects your purchasing power. It also diminishes the value of your savings and investments. That P100,000 you placed in a time deposit at the start of the year? Unless it is earning interest higher than the inflation rate, it still looks like P100,000 when you count it, but it’s buying power is definitely reduced by now.

Can you protect your wallet from inflation? There are steps you can take to lessen the impact of inflation on your finances and here are some ideas to consider.

1. Tamp down impulsive shopping. Next time you visit the grocery, come prepared with a list of things you need and be careful you don’t add anything more to the cart. Supermarkets have designed their stores to encourage you to buy more than what you need. If you have a list handy, you are less likely to succumb to temptation.

2. Revisit your ‘Wants versus Needs’ list. Employers may gradually increase salary in line with inflation, or they may not. Until then, you have to cope with the rising cost of living with the same income. Examine your expenses and assign priorities. Is it better to leave your car at home and save on gasoline and parking fees? Should you cut back on chats at gourmet coffee places? Why not pack lunches and snacks to lower your food expenses?

3. Shoot for a Raise. Most employers consider inflation when doling out pay increases, but they do it at their own time, say every start of the year. If you feel the raise you received back then is not enough, try asking again. Push for a raise that’s higher than the rate of inflation to ensure you outpace it. Your employer may say no, but then again he or she may also say yes.

4. Pay your loans with your savings. Are you settling only the minimum amount due on your credit card? If you have cash sitting on your savings account, it may make more sense to pay off or pay down your balance on your credit card as that incurs a monthly add-on rate of 3.5% or more, while your savings is probably earning 0.25% or less.

5. Go from saving to investing. If you’re keeping your cash in deposit accounts that pay little interest, time to make your money work harder. Your savings should grow as fast or faster than inflation. Start looking around for investments that will give you better yields than the inflation curve. Consult a financial adviser to help you review your options.

Inflation poses a real threat to your wallet and to your financial position in the near and long term. Take these ideas to start safeguarding your wallet and ensure an inflation-adjusted fiscal future.