How to cope with rising cost of living

The first time I really felt the rising cost of living was back in January where we went out for Sunday roast and ended up paying £80 for four people! I kid you not. My face probably looked like a slapped arse, and I immediately vowed that I would begin a mini campaign to skip on eating out. Then there has been the price creep on the groceries every week. The last time I needed to just “pick up a few bits” from our local supermarket, I almost had a heart attack when I left with just a few items and £50 poorer. We luckily have an electric car, but I have in recent weeks become the central heating police (thank goodness for the warmer weather!), and have been going around lecturing people on leaving the lights on sounding very much like my own father.

I pretty much try to avoid leaving the house altogether these days as I know everytime I do my wallet will just get an almighty spanking. But of course, there are plenty of ways to feel the rising cost of living without even leaving the four walls of your home especially with rising energy prices and the necessary evil that has become online shopping.

This sentiment is no doubt being repeated in households up and down the land as we all start feeling the rising cost of living in pretty much everything we do. After all, inflation is surpassing 6% for the first time since 1992, and Rishi Sunak is facing pressure to respond to increasing levels of inflation in his Spring Statement.

So how do we cope with this new cause of concern layered upon those which we have already had to shoulder over the past two years? We spoke to some experts to get some tips on how to cope with the rising cost of living.

rising cost of living

Know your finances

If you don’t know where your money is coming and going, now is the time to get on top of it all. Melina Abbott, author of Sacred Selling and all round money ninja advises, “Create a cashflow forecast in something like Excel and each day keep track of all money coming in, and money going out plus the balance of your account.  Do this at the end of each day for money you’ve received and money you’ve spent.  On the same spreadsheet, track money due to come in and go out in the next 30 days.  This gets you very present to money and what you focus on expands.  It also shows you where any danger zones are – so you’ll know in advance if you’re going to struggle to pay a particular bill and you can therefore take action before it happens by cutting unnecessary expenses. 

Get conscious of where your money is going and be very discerning where you choose to spend your money.  Much of what we spend money on is a habit – we do it without thinking.  For the next 3 months, for every transactions ask yourself “do I really need this?  Could I leave buying it for another few weeks?”  If the answers is yes, don’t buy it.

Look at your cash-flow forecast and if it looks like you’ll have some money left over before payday, put it in a savings account that’s not linked to your main current account.  You want to have access to it, but not be able to see it each day.  Put it aside as soon as you receive the income, not at the end of the month.  If you try to do this there won’t be any left as our outgoings always expand to fit our income.  By putting it aside first it protects our money from ourselves.  Make a pact that you’ll only spend it in an emergency.  Having savings to fall back on gives you peace of mind.” 

If you find all this terribly boring, then fret not. Another great tip from Abbott is to treat saving money as a game. Yes really! But how? “Make it fun and get the whole family involved.  Give it a name, for example Austerity Measures, Money Magic, Money Matters.  Make it short-term – for example, the next 3 months.  If we think we’re going to have to scrimp and save forever it can get very depressing.  But looking at it over the short term, say 3 months – then it’s much easier to make changes.  See it as an adventure rather than a hardship – you might not enjoy camping but it’s fun to experience once in your life.”

rising cost of living

Know where to get help

Greg Wilson, founder of energy comparison website Quotezone.co.uk, advises that households should double check they’ve made use of all the help available such as:

  • Government schemes: research government schemes like the Winter Fuel Payment which provides £100 to £300 to help pay heating bills. Customers are eligible for the scheme if they were born on or before 26 September 1955.* Be aware that the government is also exploring options such as making payments to energy suppliers to soften the blow to consumers.
  • Switch providers: according to Ofgem, households can save around £360 every year. Switching provider doesn’t just help save money, it can also allow consumers to seek out more environmentally friendly suppliers and those with better customer service. 
  • Tax relief: check out the tax relief option, which allows anyone working at home on a regular basis to claim relief on gas and electricity bills – as well as metered water and business phone calls. HMRC are offering relief worth £312 per year with no need to provide receipts or factor in any complicated calculations. 
  • Discounts and efficiency checks:  use energy efficient lightbulbs – a relatively inexpensive solution which helps to reduce costs over a long period of time.  Also, look out for schemes such as the Warm Home Discount that provide a one off discount of £140 off the winter electricity bill between September and March.

He comments: “Given the upcoming rise in energy price caps in April, it’s important that people get on the front foot and look for ways to save.

If you’re eligible, making use of the government’s schemes to help with the cost of energy bills is a good start. There are many schemes out there, including the Warm Home Discount and Winter Fuel Payments scheme, that should make bills a little easier to pay. These schemes are targeted to both the elderly and those on a low-income, providing support to the most vulnerable demographics.

But there are also many other ways to tackle increasing energy cost – one of the most effective ways is to switch provider, a process which has never been easier. By choosing an Ofgem-accredited comparison site, consumers can get an understanding of what’s on offer across a range of energy suppliers – instantly providing an overview of more competitive prices.”

Be savvy and cut back on non-essentials

Rest Less Money Expert, Mel Wright, adds: “If you’re operating on a reduced income, your focus should be on covering essentials and you should think about cutting back on non-essential spending.  Cutting out or down on subscriptions is a good place to start whether it’s magazines, gym or TV streaming.  Check your bank statement for your spending over the past few months to remind yourself of your regular payments so you can review other spend you can cut back.

When food shopping, consider buying supermarket own brand items rather than sticking with well known brands.  This can save you hundreds of pounds each year.  Also shop in the evening so you can benefit from yellow sticker items – products that are close to their sell-by date.  You can usually freeze what you aren’t going to use immediately.

Use tech to help you reduce your food waste and can help you find food at a reduced cost, sometimes even for free.  Olio and Too Good to Go are two great options.

Energy bills are soaring but there are ways you can cut back: as well as replacing light bulbs with energy efficiently LEDs, draft proof windows and doors, block cracks in the floor and skirting boards – these are just some of the ways you can shave some money off your energy bills each month.”

Find ways to supplement your income

We’ve talked a lot about saving but what about the flip side – earning? Aside from landing a new job, making money outside of work is one of the best ways to supplement your income. Abbott suggests we think about ways we can supplement income aka get a side hustle, “Do you have a skillset that others would pay for?  A spare room you can let out?   Brainstorm all the ways you could generate income – some will be nonsense but there might just be a golden gem you can test out.”

Need some inspiration of side hustle ideas? Check out this extensive list of side hustle ideas for more inspiration.

Are you feeling the effect of the rising cost of living? How have you changed your attitude towards money recently to reflect the current economic situation? Let us know in a comment below or over on our Instagram community here. Keep up to date with all the latest articles by subscribing for FREE in the box below

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