As I am sure you are aware, the UK is currently experiencing a rapid increase in the cost of living, particularly in the cost of fuel and energy. UK standards are “to fall at the fastest rate since the mid-1950s”. This is on top of the highest rate of inflation since the 1990s. There is understandably a lot of concern regarding how this will impact individual household finances and budgets.
Here are some resources to help you plan -and cope- with the changes that life throws at our wallet and hopefully lighten the load.
Step 1: Balance the books.
The first thing you should do; is find out exactly how to make and stick to a budget. If you do not have one, or do not know how to make one, you can find out how to HERE https://www.outsourcedacc.co.uk/blog/new-year-new-budget/.
Once you have a detailed budget, go through every expense category, and see where you can cut back on spending. There is a veritable cornucopia of articles out there on ways to cut back on spending – my favourites are by MoneySavingExpert. It is always worth contacting your phone/broadband/utility providers and asking if there is anything they can do to reduce your monthly bill; the worst they can do is say no and you may be surprised by the discounts that you may be able to get, just by asking.
You can also check the salary calculator https://www.thesalarycalculator.co.uk/salary.php to help you check what your take home pay will likely be after the new National Insurance increases.
Step 2: Get what you are entitled to.
Most of us spend our lives paying into the welfare system, knowing that we can help people and that it will have our back if we ever fall on hard times. Then why is their still such a stigma around claiming for what you’re owed; especially since the cost of living has become so uncoupled from take home pay? I say, take what you are owed! If you do not know what you can claim for click HERE https://www.entitledto.co.uk/benefits-calculator/Intro/Home?cid=67b10e14-102b-48db-a03f-0fb3906248dd and you can receive an estimate of what you are entitled to with regards to benefits, tax credits and universal credits.
Step 3: Offensive Budgeting
In almost opposition to step 1 (which can also be called defensive budgeting) this sector is about increasing your income. In short, cutting expenses to conserve money is deemed a defensive strategy, whilst increasing the amount of money entering your budget is deemed an offensive strategy. To do this there are a few tried and tested options:
- Create a ‘side hustle’ to utilise your downtime.
- Increase your formalised education (get a new qualification etc)
- Job hop – if you are a professional; this is the easiest way to increase your income as each job hop yields on average 10-15%, staying at each job on average for 2.2 years.
- Ensure that each year, you receive at least the inflation rate as a pay increase, to ensure your actual salary is not decreasing. If you do not receive this, start looking for a new job as you have just received a pay cut.
- Utilise free courses to increase education and desirability. I recommend the following (some may not be free!)
Step 4 – Look after yourself
As a wise man once said: “a healthy man wants many things, a sick man wants only one.”
With this in mind, the cost-of-living crisis is causing a lot of anxiety and it is important you look after yourself.
If you are struggling, please reach out to the following organisations who can help:
- http://• https://www.samaritans.org/how-we-can-help/contact-samaritan/ – The Samaritans are a mental health hotline crisis charity.
- https://www.mind.org.uk/need-urgent-help/using-this-tool – Mind are another mental health crisis charity.
- https://www.nhs.uk/mental-health/talking-therapies-medicine-treatments/talking-therapies-and-counselling/nhs-talking-therapies/ – NHS Talking Therapies – you can self-refer for mental health support from the NHS.
- https://www.stepchange.org/debt-advice-start.aspx – StepChange Debt Charity – if you are struggling with Debt, they can help you arrange repayment plans and work with your creditors to help you.
- https://clubs.moneysavingexpert.com/cheapenergyclub – Sign up for notifications if a cheaper energy tariff becomes available.
Let’s not let the cost-of-living crisis create a mental health crisis. Although we know it does not work like that, reach out to someone if you need help.