Dealing with the rising cost of living

Dealing with the rising cost of living

With the cost of living rising, 2022 has already been dubbed “the year of the big squeeze”. Even for workers who receive a modest pay rise this year, in most cases, it is likely to be outstripped by the exponential rise of gas and electricity, the increase in mortgage interest rates, and the cost of the weekly big shop.

However, there are some steps we can all take to ensure our money stretches as far as it can. And making the most of the income you have is particularly important in the current inflationary environment we find ourselves in.

This is a go-to guide showing some of the ways you can make your money go further and ensure you keep your financial head above water despite rising costs.

Energy: monitor your home expenditure

Due to energy price rises making many energy suppliers go bust, most of us will not be able to save by changing suppliers. However, there are still ways to save money. Steps include giving your energy supplier regular metre readings, ensuring you stay on top of your bills and making you aware if anything seems wrong. Some suppliers have been known to make changes to tariffs or make mistakes when charging customers, so it is always a good idea to check your household bills regularly.

Broadband: switch supplier if you are out of contract

Broadband internet speeds and reliability are more important than ever, particularly when so many of us are working from home. There are still deals around, so you shouldn’t be nervous about switching. Most broadband contracts are anything between 12 months and two years, so initially you should check if you are out of contract before switching in order to avoid having to pay exit fees.

Using a comparison site can bring extra savings and bonuses, and guaranteed speeds. If you are concerned about speed or service quality, checking complaints data published by Ofcom before opting for a particular broadband provider will ensure you avoid those with any issues, or bad customer service.

Water: think about switching to a water metre

Unfortunately no matter where you are in the UK, you will be forced to use the water company in your area. However, many people could save money by switching to a water metre, which tends to save the average user around £100 per year.

That said, some heavier users of water, such as those with larger families or young children, are likely to pay more if they use a metre. Before asking for a water metre to be installed, you can check the Consumer Council for Water online calculator to see whether it is worth switching.

Unless you live in an area where water metres are compulsory, you will usually have a trial period of 24 months during which time you can switch back to you old, fixed charges if it works out to be more expensive.

Mobile phone: review your mobile contract

No one mobile phone usage is the same as another, so ensuring you match your contract with the way you use your phone, helps to make sure you do not overpay. The website, Billmonitor, can analyse your online bills and will suggest the best tariff for you.

Additionally, mobile phone companies rarely reward loyalty, so the only way you can reduce your bill is to switch provider.

Technology

Technology is a useful tool to help keep your spending on track. Whether that is regularly checking your credit card bills and bank account online or using a dedicated app to ensure you can view all your spending at once.

Get cashback on spending

Where you do have to spend, think about getting rewarded for it. We’ve all seen adverts for TopCashback for example (other cashback companies are available), which give you a small percentage cash return you can let accumulate and withdraw later.

Some credit cards also offer rewards on spending, however with all credit cards, it is essential you pay off your balance every month (unless you have a 0% card) so that the interest you pay does not dwarf any rewards.

Reduce TV/music streaming subscriptions

Consider whether you use all your TV and streaming subscriptions to the max. Occasional use does not provide you with a good deal. Many people signed up to services such as Spotify, Netflix or Sky during lockdown and may no longer use them as much.

Food shopping

If you tend to shop at one of the “big four” supermarkets, such as Sainsburys or Tesco, think about buying their own brand products rather than branded goods. Set yourself a strict, affordable supermarket budget. Supermarket loyalty schemes can help make savings or you can accumulate points that equate to money off. Alternatively, try out a budget supermarket, you may be surprised! Both at the savings you can make and the range and quality of the goods on offer.

As with anything to do with finances, if you find yourself struggling, contact the company you owe money to. Whilst it may be easy to delete that demanding email or stuff a bill demand in the bottom of the recycling bin, you are only storing up trouble. Most companies will offer payment plans, or reduce or freeze payments for a period of time. You simply need to let them know you are in difficulties. After all, it’s in their interest to encourage payment, even if it is at a slower rate.