As soaring inflation dents salary growth, is it time we consider ways to maximise income?

Soaring inflation levels this year have wreaked havoc in the capital and financial markets around the world. As consumer demand returned with a vengeance post-pandemic, businesses started expanding operations and hiring more resources anticipating a bright future. But persistently high inflation levels prompted central banks across economies to hike rates in an attempt to cool down the pace of growth.

For businesses, this sudden change in outlook meant that many of the resources deployed towards expansion were no longer feasible, leading to mass layoffs. For professionals, this brought on a harsh change in prospects right on the heels of record salary hikes and a plentiful job market. The situation is representative of the multidimensional impact that inflation has on incomes.

Is inflation eating your lunch?

According to a recent survey of 360 multinational companies across 68 countries, inflation has resulted in a 3.8% average fall in salaries globally in 2022. India was fortunate to have seen positive salary growth in real terms at 2.1% for the year, showed the survey by ECA International. However, with the elevated levels of volatility in both the job and financial markets showing no signs of letting up, it appears inflation might be here to overstay after all.

Your salary could use a hand

Perhaps it’s time for the markets to do what your career may not be able to singularly accomplish – to grow your salary.

A diversified investment portfolio is the best hedge against inflation. But such investments are generally made for the long-term and do not help with short-term liquidity. Despite easing to a three-month low in October, at 6.77%, India’s retail inflation was still above the RBI’s target. This meant that most short-term investments do not deliver inflation-beating returns either.

Under such circumstances, one way to maximise money in hand is through a
rewarding salary account. While this might sound unconventional, a salary account with meaningful benefits that add real value for money can shoulder the load of routine expenses and lifestyle costs.

Every bank has a salary account variant with a range of benefits, from rewards and discounts on shopping to fee waivers on various services. You can maximise these benefits based on a fair understanding of your financial behaviour and some research on various salary account offers in the market.

An intelligent salary account

Most traditional banks offer the conventional array of salary account benefits such as no minimum balance requirement, higher spending limits and rewards for spending more money. But newer products in the market, such as the
Fi Money salary account, provide benefits that add value to the money that’s just sitting in your account apart from the usual spend-based
rewards.

These benefits include a joining bonus, rewards on receiving your salary and a top-up on health insurance amounting to three times your existing cover. In combination with the rewards on spending, these benefits add up to ₹1000 in value to your monthly salary. All this at no extra cost makes for a strong value proposition.

Along with these, intelligent features like AI-powered expenditure tracking and behaviour analysis, customisable automated
investment rules and the ability to
connect multiple bank accounts on the Fi Money app can help you save and invest more of your salary.

While your investments might be able to beat inflation in the long term, the liquid cash you need to maintain in your bank account for day-to-day needs will remain acutely vulnerable to inflation. A genuinely rewarding salary account is your best bet to mitigate its impact.