In these uncertain times, dramatic increases in the cost of living can be overwhelming, but with the right mindset, you can take control of your finances. In this article we look at useful information on budgeting, reducing expenses, and managing debt.
Budgeting and financial planning strategies
Budgeting and financial planning are key components of saving money during the cost-of-living crisis. One of the most effective ways to get a handle on your finances is to create a budget. This means taking a look at your income and expenses, and figuring out where you can cut back.
Start by listing all of your income sources, such as your salary, any benefits you receive, and any other money that comes into your household. Then, make a list of all of your expenses, including rent or mortgage payments, utility bills, food, transportation, and any other regular expenses.
Once you have a clear picture of your income and expenses, you can start to make changes. Look for areas where you can reduce your spending, such as by cutting back on unnecessary subscriptions or memberships, or by finding cheaper alternatives for regular purchases like groceries.
Another important aspect of financial planning is setting goals. Whilst putting a little aside each month can be difficult, actively focusing on saving for a rainy day, paying off debt, or saving for a big purchase can help you stay motivated and focused on your budget.
Tips you can use to help reduce your household bills
Shop around for better deals: When it comes to big-ticket items like appliances or electronics, don’t just settle for the first price you see. Shop around and compare prices from different retailers to make sure you’re getting the best deal possible.
Cut back on eating out: Eating out can be a major expense, especially if you do it often. Try to cook more meals at home, and bring your lunch to work or school instead of buying it. You’ll save money and probably eat healthier too.
Use energy-efficient appliances and light bulbs: This can help you save on your energy bills over time. Not only are they more energy efficient, but they also tend to last longer.
Take advantage of free or low-cost entertainment options: Instead of spending a lot of money on movies or concerts, look for free or low-cost entertainment options in your community such as local parks, libraries, or community centres.
Be mindful of subscriptions and memberships: It’s easy to lose track of all the subscriptions and memberships we have. Take a look at all of your recurring expenses and cancel anything that you’re not using or don’t need.
How to negotiate bills and reduce recurring costs
Negotiating bills and reducing recurring costs is a great way to save money on your household expenses. Here are a few tips to help you get started.
Don’t be afraid to haggle: When it comes to bills, remember that you’re not stuck with the prices that are quoted to you. Call up your service providers and ask if there are any discounts or promotions that you can take advantage of. You’ll be surprised how often you can get a better deal just by asking.
Bundle your services: If you use multiple services from the same provider, see if you can bundle them together for a discounted rate. For example, if you have internet, premium television and home phone with the same company, ask if they can give you a package deal.
Review your bills regularly: Take a look at your bills every month and see if there are any charges that you don’t recognise. If you find any, call the service provider and ask them to explain it. Sometimes, they will be able to give you a refund or credit for any mistakes.
Consider switching providers: If you’re not happy with the service or the prices you’re currently paying, consider switching to a new provider. Do your research and compare the prices and services of different companies to find the best deal.
Automate your bill payments: This can help you avoid late fees and penalties. Set up automatic payments so you don’t have to worry about remembering to pay your bills on time.
Remember, don’t be afraid to negotiate and ask for discounts, it’s always worth a try.
Managing debt
Managing debt and improving credit are important steps in achieving financial stability. One of the most effective ways to manage debt is to create a budget (we’ve highlighted some great hints and tips on how you can achieve this earlier), and more importantly, stick to it. This means taking a close look at your income and expenses and figuring out where you can cut back. By reducing your expenses, you’ll be able to put more money towards paying off your debt.
When it comes to paying off your debts, it’s important to prioritise which ones to pay off first. Start by paying off the debts with the highest interest rates first, as they will be the most expensive in the long run. If you’re not sure which to prioritise, give each lender a ring, or drop them an email and ask them what exactly you are paying what are the interest rates and where the money is being allocated. Add these to a list so you can keep track of what goes where.
If you have multiple debts with different interest rates, consider consolidating them into one loan with a lower interest rate. Doing this can make it easier to manage your debt and save you money in the long run. However, it’s important to ensure that this strategy works for you and your specific financial situation, and consider the pros and more importantly the cons before consolidating your debt.
Trouble managing your debt? You’re not alone. Don’t be afraid to seek professional help. There are organisations that can help you with debt management and credit counselling, we’ve listed 3 below that you may find useful, and they can help you create a plan to manage and reduce your debt and improve your credit score.
- Citizens Advice Bureau (CAB) – https://www.citizensadvice.org.uk/
- StepChange Debt Charity – https://www.stepchange.org/
- National Debtline – https://www.nationaldebtline.org/
These organisations can provide free and confidential advice as well as a variety of resources and tools to help you manage your debt and improve your credit. They can help you with budgeting, negotiating with creditors, and creating a plan to get out of debt. Whichever you decide to approach, it’s worthwhile doing your own research and evaluate whether that organisation best fits your needs.
Save on your travel costs
With fuel prices at a record high, finding alternatives to using/owning a car can be a great way to save on your travel costs and stretch your budget to make your money go further.
When looking to travel in the near future, one the best ways to save money is to plan ahead. Book your trains, buses or coaches in advance to take advantage of early bird discounts, and try to avoid peak travel times when prices tend to be higher.
Another way to save money on travel is to compare prices. Before you book anything, compare prices from different train, bus or coach companies. Websites such as The Trainline and Megabus are a great way to compare prices, and check for deals and discounts.
If you’re planning on taking multiple train journeys, consider getting a railcard. These cards can give you up to a third off most train fares, and they’re available for a variety of groups such as students, seniors, and families.
What if you don’t qualify for a railcard? Look to split your journeys to make savings on ticket prices. Websites such as the Trainline can suggest split fares and show you the savings you can make by buying split tickets.
Instead of taking the train, why not consider taking a bus or coach, especially for shorter journeys. Companies such as National Express offer low-cost options, and you can save even more by booking in advance.
If your destination is nearby, consider walking or if you have a bike that’s been locked away in a shed or garage, why not cycle?. It’s a great way to see the sights and get some exercise, whilst saving money too!
By doing your research and choosing alternative methods of transport , you can save money on your travel and have more money to spend elsewhere. Remember, a little bit of planning and research can go a long way when it comes to saving on travel costs.