Weathering the storm – cutting costs and building a buffer
With energy prices and the cost of living rocketing, many people are worried about meeting their financial commitments. Ideally, we would all have a savings buffer for difficult times but the scale of price rises means some will already be dipping into those funds.
Government assistance is likely in many countries. In the meantime, here are a few things you can do to scale back spending if you’re not used to working to a tight budget…
Take control:
When times are tough, financial problems can feel overwhelming and it is tempting to hide from the problem. This is understandable, but having a proper grip of your income and expenditure is the first step to ensuring things don’t spiral out of control. Even when the numbers don’t add up, it is better to know and seek help.
Cut costs:
If you have areas where you can cut back – such as non-essential subscriptions, gym membership or expensive car payments, this could be one area where shopping around or changing your habits can help. Consider cheaper exercise options, or combining your journey to work with exercise by walking or cycling, for example. Make sure you don’t have ongoing subscriptions for services you no longer need.
Socialise for less:
Everyone will be struggling so talk to your friends and family about ways you can get together without getting into debt. Meet friends for walks, look for entertainment deals and cheap night out options or pool your resources, cook together and watch a film at home.
Shopping around:
Looking for cheaper energy suppliers, phone, broadband and insurances may be harder in today’s economic environment. It’s still worth keeping an eye on these. When it comes to renewals, make sure you’re not tied into expensive options.
Raise your income:
Ensure you’re receiving all the benefits offered by your employer and government. Large families, older people, those with special needs and people with disabilities may also be eligible for grants, support or special rates on energy. Other ways of raising cash include selling items online or in a local forum or renting out a spare bedroom to a lodger.
Pay annually:
This can be cheaper than paying monthly for insurance and other annual costs. If you don’t have the money upfront, make sure to read the full details of the agreement – and compare it with competing offers - before buying anything on instalment.
Cook for less:
Where possible, meal planning, buying in bulk and batch cooking are all tactics that can help you cut your shopping bills. If you have a choice of supermarkets consider changing to a cheaper option. One tactic is to shop for seven days but push your shop back a day each week, using leftovers for the extra day. Every seven weeks you’ll have saved the cost of a shop. Others find that doing a monthly or quarterly bulk shop for non-perishable staples works well – however, this depends on having extra cash to buy ahead.
Don’t suffer in silence. If you can’t cope, talk to your lenders as soon as possible. At Intrum, we have trained advisers who can help you work out your income and expenditure and then set up a payment schedule you can afford. We can refer you to an independent debt advice charity if you are struggling to cope and need more help. You don’t have to manage alone.
