The money in our pockets is getting increasingly harder to stretch, as living costs surge.

Retail prices rose in February at their fastest rate in over a decade, according to the BRC-NielsenIQ Shop Price Index, with food prices a key driver.

Many rail fares have been recently hiked, and motorists are also being squeezed by soaring fuel prices – and that’s all on top of rising energy bills.

Maike Currie, investment director at Fidelity International (fidelity.co.uk) says: “It’s not an easy time to balance your household finances, but there are some steps you can take.”

1. Cut back where possible

Currie says: “To take control of your weekly or monthly spending, ensure you know exactly what you’re paying for and you’re getting the best value for money.

“Whether that means switching from named brands to supermarket own brands during the food shop, or checking your phone contracts, home broadband and insurance policies to make sure you are getting the best deal, it’s worth putting the effort in if you can claw back any significant savings.”

2. Limit the impacts on your retirement pot

“If you are approaching retirement, it’s important to review all your options,” says Currie. “You might need to adjust some of your expectations, or decide to delay when you access your pension savings.

“If you do decide this is the best course of action, speak to your pension provider about your intentions. It means your pension savings will stay invested in the market for longer, giving your investments more time to grow – if markets rise.”

3. Ask for a pay rise

Fidelity found half (49%) of people have never asked for a pay rise – including 55% of women. “If you think it’s time to speak to your manager about a pay rise or a promotion, keep an eye on the salaries offered for similar roles,” Currie advises.

Online calculators will help indicate how much you would need for your earnings to keep up with inflation.

Currie adds: “Don’t forget that a pay rise isn’t just about your take home pay. While discussing your options, remember benefits such as your workplace pension could boost your personal finances in the long-term as well.”

4. Consider the long haul

“If you’re in a position where you can put away some of your finances for the future, then it’s worth considering a stocks and shares ISA or a general investment account,” Currie says.

The value of stocks and shares can go down as well as up, and there has been market volatility recently against a backdrop of global economic and political uncertainties.

Currie adds: “The key is to have a diversified portfolio and to not make any knee-jerk reactions. By investing, you will also benefit from something called compound growth – this means you earn interest on the money you have made from your investments, which can help you stay one step ahead of inflation.”