Nine Ways to Tackle the Cost of Living Crisis & Inflation

02 Feb 2023 · by Marketing Team

General

Nine Ways to Tackle the Cost of Living Crisis & Inflation

From Michael Nicolaou

With the rising cost of both living and inflation, millions are suffering across the country. In our latest article, we will explore nine key ways in which you can save money and tackle rising inflation.

1.) Know What you Spend with a Detailed Budget

By completing a detailed budget planner, you can effectively plan your monthly income and outgoings:

A budget will show you where and if the ‘missing money’ is located. You log your income, essential spending and leisure spending which normally will reveal a disposable income that doesn’t quite reflect reality. Find this money, save this money.
Going through your bank statements can reveal duplicate subscriptions or unexpected payments that you can cancel, amend or challenge.
It helps you recognise where you need to scale back spending by quantifying how much you actually spend on the small costs. Many of us love our coffee for example – by tracking how much you spend daily on things such as coffee and lunches, you can identify and reduce the small costs that all add up!

2.) Savings – Go Digital & Go Big

In a high inflation market, savings can become eroded and many of us will not necessarily see the psychological barrier that we inadvertently put up – the figures stay but we may not see the loss. In order to overcome this, you can think about the following:

Make sure you get the best return on your savings. Comparison websites don’t always show you the best rate but will still give you a guide of some of the best deals.
Most banks have gone completely digital, with no branch or sometimes customer service teams. Overcoming this stigma can open a new world of not just better interest rates, but also ease of banking since digital is the future.
Investing any spare money that you might have in long term assets such as stocks and funds will give you the opportunity for growth that either meets or exceeds inflation. Make sure you have an emergency fund of cash that you can invest for the long term. Investments can rise as well as fall and you may get back less than you put in, so it’s important to take advice from a professional before investing to have the best chances of success.

3.) Shop Around for the Best Deals

Shopping around for the best deal has become very challenging in recent years. Whilst it is pointless for your energy bills at the moment, as all the providers are hitting the price cap, there are still many things that you can do:

Many providers particularly in technology and insurance slowly increase prices over time, which is call ‘price staircasing’, which exploits clients who either refuse to move or cannot move to another supplier. If you are unable to shop around for a better utility deal for example, simply call them to either express dissatisfaction and threaten to cancel and 9/10 times, they will offer a discount to retain your business. Tread with caution however, this doesn’t always work and be prepared to actually cancel if they won’t budge.
Use comparison websites. Looking for cheaper prices for comparable service can make a big difference. Make sure you use 2 comparison websites because they may yield different results. Also ensure they display all prices, some will have an option that hides all deals that they cannot can facilitate a switch for.

4.) Reduce Your Food Waste

Each year some 9.5 million tonnes of food find its way to the bin in the UK alone. Considering how high food inflation is, you should tackle this:

Make sure you plan your meals in advance to utilise the food that will be expiring soon, and check what is in the fridge before doing a food shop.
Many foods have best before dates, but this doesn’t mean its off. Do your research to get an understanding of what is safe to keep. Many foods that pass the smell and appearance test can be kept, but unfortunately this is likely a keep space where things are thrown away in the bin.
Look at switching to different brands/non brands, or even changing to a more cost effective supermarket. Often the quality and taste can be identical for certain products. You simply pay more because you buy into a brand, so experiment and try a variety to see if you can spot the difference.

5.) Improve the Energy Efficiency of Your Home

Investing in your home can prove dividends and by making small changes that require very little money you can save a lot of cash in the long term. Here are a few of the options those on tight budgets to boost your energy efficiency:

Most windows have a rubber lining in the frame that wears over time. If you hold your hand to window and you feel cold air breezing through, this can easily be solved using some rubber strips. You can buy also buy some draught excluder tape – Don’t live with it!
Make sure your attic is insulated. Insulation is relatively cheap and you can make a very quick return on your investment by doing this, since heat rises and gets lost through the roof. Many attics have gaps where there is no insulation or older homes may have a thin layer that needs to be replaced over time or added to.
Cavity wall insulation – This can make a big difference in losing heat through the walls, but demand for cavity insulation is high so it will cost you. Ensure that you don’t use any insulation that ‘stops the wall breathing’ as this can also give rise to damp issues. Make sure you do your research and take advice from an expert.
LED bulbs – They are just as good as traditional but work on a much lower wattage. This doesn’t mean all lights should remain on all the time, since don’t forget doing so will speed up the need to buy a new bulb.
Smart heating – Digitising your home heating and water can be relatively cheap to do but give you much more control over your actual usage. For example, if you go out for the day you could use your mobile to turn your heating off and then turn it on whilst traveling home.

6.) Bulk Buy & Pay for Costs Yearly

When you see a discount on a product you often use that has a long life e.g. canned goods, buy them in bulk. Inflation on food is currently very high, so in theory – stocking up now will earn ‘interest’ at its inflationary rate by avoiding having to buy it at more costly prices in the future, although prices of course could go down.
Many costs such as car insurance attract eye watering interest that is baked into the price when you pay monthly. Clearing the balance and paying for such costs yearly mean you save a substantial amount on the cost.

7.) Bin your Bank – Change your Current Account

Many bank accounts offer little in the way of real benefits, but there are those that offer cashback on things like your weekly food shop, energy bills and council tax. Shop around to ensure your current account gives you these rewards, which at the moment could be worth hundreds of pounds a year.
There are some current accounts that will offer you a welcome bonus for switching your bank account, some offers over the past year have been as high as £200. Be aware that you will likely need to meet their criteria, but this could give a welcome boost during difficult times.

8.) Capitalise on Cashback

There are many cashback websites that will reward you for buying via their links or platforms with generous cashback. Don’t be suckered into purchasing things just for the cashback. Check to see if items or services you were already planning on buying offer cashback via these sites.

9.) Deal with your Debt

For credit card debt, look to transfer the balance to a new provider which offers an interest free period. This can help you pay down the debt quickly, just be mindful interest rates can often be very high on new spending.
Make overpayments on your highest interest debt to clear them as soon as possible. Once you have got out of debt, the best guidance we could give one our clients is to avoid debt at all costs. There can be benefits and incentives, but its all to lead as many clients as possible into a debt situation where your paying interest.
Don’t suffer in silence. If you have a large amount of debt and are struggling to cope, speak to the providers and let them know you are having financial difficulties. Be honest and they are obligated to help you avoid situations such as ‘debt spirals’ and get back on track. They may offer to waive fees, provide you with an interest free period or some other arrangement.
Not all banks or providers however live up to their responsibilities, so be prepared for them to say ‘tough’. Where this happens, this is not the end of the journey. You should check out this website to read and understand the Standards for lending to know what you should expect and what they should be doing:
Please Note: The above should not be treated as debt advice and is guidance only, you should seek professional advice but be cautious as there are many free sources of help in the market, but also many companies that charge you for debt consolidation and advice (which should be avoided). The Citizens Advice free debt line should be your first port of call.

Ensure That Your Finances Are Working as They Should be to Help Offset the Cost of Living Crisis

Fintuity are able assist you in a number of ways of modelling and managing your personal finances, including:

A cutting edge Virtual Adviser with an optional complimentary IFA meeting
An extensive library of up to date financial advice, as well as a searchable blog with hundreds of articles

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Fintuity is like a traditional IFA, only we are an online adviser which means we can offer a more cost effective, time-sensitive and flexible service! We offer the full range of IFA services via our digital platform, at below industry rates and at your convenience. Please do not hesitate to get in touch to see how we can assist you.

For all enquiries please visit www.fintuity.com or email support@fintuity.com

Please Note: All information, references and dates included in this article were accurate at the time of publishing.

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