Finance

How To Prepare Financially For The Rising Cost Of Living

How To Prepare Financially For The Rising Cost Of Living

Inflation in the UK is at its highest levels for 30 years, meaning a lot of your bills might soon be going up – if they haven’t already. 

With rising fuel prices, energy bills set to soar and food costing more at supermarket tills, 2022 looks set to be a year of tightened purse strings and a greater focus on budgeting for many households.

If you’re looking to prune your outgoings to try to absorb some of the expenses, here are four methods to do it.

Put a bit aside every month

Creating an all-bases household budget is the crucial first step in understanding your finances, and how they might be affected in the year ahead.

Once you’ve ascertained how much spare cash you have each month, commit to putting some of it aside in a savings account. This pot of funds will soon start to grow and can be used for family treats, such as holidays or big events.

It could also become an emergency fund for when things go wrong, like when home repairs are required or your car breaks down.

If you’re faced with an unexpected household bill that you haven’t budgeted for or that your emergency pot can’t cover, a bad credit loan could help you spread the cost if you’re worried about your credit history. But be sure you can afford to pay the loan back if you do apply for credit.

Cut your expenses where possible

Take a forensic look at those outgoings. Split them between necessities, nice to have and not needed.

The latter can obviously go immediately but be more considerate with your things deemed nice to have. 

Keeping a few treats will help you stick to your budget, as pining for things can lead to temptation if you strip the lot away.

Hold off on the big purchases

If you’ve been considering a big new purchase, it might be worth your while holding off in the short term. 

April 2022 in particular is set to be a month that many households will feel the pinch with a price cap on energy costs set to be lifted significantly. This will affect huge numbers of households up and down the country.

Had your eye on a new car or an upgrade to some household tech? It’s smart to hold off for now until you’ve got a grip back on your budget later in the year.

Make use of your loyalty schemes or discounts

Whether it’s supermarket points schemes, free trials or shopping around for cheaper items, now is the time to become a savvy shopper.

Unnecessary overspending won’t help your budget and that extra bit of effort might help you squirrel a bit more away or help you afford an extra treat.

About the author

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Miller Willson

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