Feeling the pinch of rising costs in the UK? You’re definitely not alone. The cost of living crisis is hitting many people across the country hard. From inflation and stagnant wages to soaring housing, fuel & food costs; it can be tough to make ends meet. But don’t worry, we’ve got your back! In this blog post, we’ll provide practical tips and advice on how to survive the cost of living crisis and keep your finances on track.
The Cost of Living Crisis in the UK
First things first, let’s take a look at what’s driving the cost of living crisis. Inflation has been on the rise in recent years, eating away at the purchasing power of people’s wages. In 2021, inflation hit a 10-year high of 4.2%, according to the Office for National Statistics. Meanwhile, wages have remained relatively stagnant, with the average weekly earnings of employees in the UK only increasing by 2.5% in 2021.
Housing costs are also a significant factor in the cost of living crisis. The average house price in the UK has risen by over 20% in the past five years, making it increasingly difficult for people to afford a home. As you may well have seen if you followed along with our first-time buyers house buying journey over on my YouTube channel from the past few years. Renting is also becoming more expensive, with the average rent in the UK increasing by 2.3% in the past year alone.
Beating Rising Costs
Now, let’s get to the helpful tips! Despite the challenges of the cost of living crisis, there are steps you can take to beat rising costs and manage your finances. Here are some practical tips and ideas:
- Create a budget: Okay, okay, we know, “budget” can be a scary word. But trust us, creating a budget can help you track your income and expenses, identify areas where you can cut back, and set financial goals. You can create a budget using a spreadsheet or online tool.
- Cut back on unnecessary expenses: We’re not saying you have to give up your daily latte or anything, but look for areas where you can trim your expenses. Maybe try eating out less, cancelling subscriptions you don’t use, or finding cheaper alternatives to your current products or services. Going through your bank accounts is a great way of seeing where your money goes every month!
- Increase your income: This one might sound easier said than done, but hear us out! Consider ways to increase your income, such as taking on a side hustle, asking for a pay rise at work, or selling unwanted items online. Who knows, you might end up finding a hidden talent you never knew you had!
- Save on groceries: Groceries can be a significant expense, but there are ways to save. Look for sales and discounts, buy in bulk, and plan your meals in advance. Plus, you might even discover some new favourite recipes in the process. Bulk cooking also helps with reducing cooking costs as well as saving on time.
- Save on utilities: Energy bills can also add up quickly, and with the rise in costs of fuel this one is not necessarily in our control. Make sure you’re on the best tariff for your usage, turn off appliances when not in use, and consider energy-saving measures like the products I’ve featured in this ideas list as well as actions such as switching to LED lightbulbs or using a heated blanket instead of turning the heating on. Not only will you save money, but you’ll also be doing your part for the planet.
Financial Knowledge For Your Future
It’s hard to always know what to do if you’re not financial expert. In fact, many people in the UK lack financial education and knowledge, which can make it tough to make informed decisions about their finances and manage their money effectively. But fear not, there are resources and tools available that can help:
- Online courses: You don’t have to go back to school to learn about personal finance! There are plenty of online courses available that cover topics such as budgeting, investing, and debt management. Some popular options include Coursera, Udemy, and Skillshare.
- Apps: There are also many mobile apps that can help you manage your money and improve your financial literacy. Some popular ones include Money Dashboard, Plum, and Cleo. I personally love Plum because it helps me track my spending, save without realising and get me to my financial goals quicker!
- Government resources: The UK government provides a range of resources and tools to help people manage their finances. The Money Advice Service, for example, offers free, impartial advice on topics such as debt, savings, and pensions. There’s also lots of free resources out there to help you learn life skills like budgeting and money management.
- Financial advisors: If you have more complex financial needs, or if you’re not sure where to start, consider seeking the help of a financial advisor. They can provide personalised advice and guidance based on your individual situation.
- Be open and honest to your friends and family so that they can help you where possible. Don’t suffer in silence! It’s really important to get help if you need it and lots of organisations are there to support you if you need it.
That’s it for today’s post on our tips on surviving the cost of living crisis in the UK but there’s heaps more information on my blog about budgeting and saving money! Remember, while the cost of living crisis can be tough, there are steps you can take to manage your finances and keep your head above water. The worst thing to do is bury your head in the sand. By creating a budget, cutting back on expenses, and seeking out resources and tools to help you, you can beat rising costs and achieve your financial goals. Good luck!
