The cost-of-living crisis has been affecting people for some time now, but it is about to get worse before it gets better with the lifting of the energy price cap and NI contributions about to rise. It is thought that around 2.5 million families will be plunged into fuel poverty by spring and many more will struggle with their finances. It is hoped that inflation will ease towards the end of the year, but what can households do to manage in the meantime?
Make a Budget
A good starting point is to create a household budget that will allow you to control your spending. You want to calculate your total household income and then divide this between different types of monthly spending. Many people find the 50/30/20 rule to be a good starting point – this involves 50% of your income going towards essential spending (rent/mortgage, bills and food), 30% towards non-essential spending (clothes, meals out, cinema etc.) and 20% going towards savings/debt clearance. You can adjust the percentages as you wish as the idea is simply to start controlling your spending.
Shop for Deals
With any kind of purchase that you need to make, it is good practice to shop around for deals and promotions. You can often make savings by shopping around, especially if you are shopping online as there are so many options (many places offer discounts for new customers). Additionally, NHS workers can get discounts at many major retailers, such as an Amazon NHS discount.
Check if You Can Pay Less Council Tax
Council tax is a major cost to cover each month and often increases each year. It is worth checking to see if you could pay less as there are many people that are eligible for discounts but do not realize it. You might be able to get a reduction if you are on low income or claim benefits or get a discount if you live alone, you have a live-in care worker or if you live with full-time students.
Switch to Cheaper Broadband, Phone & TV
It is also worth comparing your broadband, phone and TV packages as these are all areas where you can often make savings. There are handy websites that allow you to compare your options and you might even find that your current provider offers you a better deal if you call them up towards the end of your agreement.
Save on Travel Costs
Travel can also be a major cost to cover each month. If possible, you should work from home to keep travel costs down or alternatively try to walk/cycle instead of drive. If you travel by train regularly, you could look into a railcard or season ticket to make savings.
It is a worrying time financially for many and things are likely to get worse before they get better, so hopefully, this post will prove to be useful.
