What is the cost of living and why is rising?
This is the amount of money you need to cover basic expenses such as housing, food and bills. In January 2022, consumer prices soared to 5.5% higher than the previous year and is estimated to reach a 7% increase by April 2022.
Inflation is currently being caused by petrol costs and energy tariffs going up as a result of the Covid 19 pandemic, which is now being escalated by the invasion in Ukraine by Russia. Many of us are feeling the squeeze already, but the question on everyone’s mind is: how can you prepare yourself financially? No matter what your situation is, it can still be possible to cut your expenses and save money with our top tips.
- Get to know your bank statements
It’s helpful to go through your direct debits regularly and review what you really need to be paying out for. Try and make a list of essentials and non-essentials. For instance, you have to pay your mortgage, but are you being charged for a gym membership that you don’t use, or maybe you’re doubling up on streaming services that could be consolidated within your household? Do you need to pay for a TV license if you’re only using streaming services such as Netflix? There will be expenses you keep, but it’s worth questioning what is important to you, and if your money could be better spent elsewhere right now.
- Create a budget and stick to it
Budgeting is a simple way to take a closer look at your finances and prioritise how to spend your money. This should help you understand where your wages are going, and allow you to choose your own limitations and goals. Use our free budget calculator today to get started.
- Are petrol prices exhausting you?
The recent price hikes are unavoidable for many drivers, however alternative ways of travel could help you save. If working from home isn’t feasible, ask yourself if public transport, or car sharing, could be a cheaper option for your daily commute. Or even go green and get fit at the same time by walking or cycling to your destination.
- Food for thought
How much money are you (literally) throwing away due to food waste? On average the UK throws away 9.5 million tonnes of food a year, and billions of pounds are wasted because of this. But don’t worry, you don’t have to give up your favourite foods. Simply utilise what you already have by creating meal plans, checking use by dates and eating leftovers can reduce your food shopping list each week.
- Use less energy
There are plenty of small changes you can make in your day-to-day life. Start with the basics, like turning off lights when not using them (don’t forget energy efficient bulbs!), switching off plugs and shortening your shower time when possible.
For most of us, our appliances with the highest consumption are the ones we rely on daily such as washing machines, dryers and dishwashers. So how do you get around that? Savings can be made by washing on a low temperature, air drying whenever possible, and ensuring the dishwasher is full before you use it.
If you can, make sure your home is well insulated and draft proof – for more tips on this read here.
- Review your mortgage
Do I need to remortgage? As with most things in life, every situation is different, however switching to a better deal could be an instant way to reduce your monthly costs. Our expert advisers have access to thousands of products from over 90 lenders, to find the right deal for you. Give us a call on 0330 1666 666 or get in touch via email at [email protected]
You may have to pay an early repayment charge to your existing lender if you remortgage.