Personal Finance Management:
7 Ways to Cope with the Cost of Living Going Up

See also: Top Tips for Saving Money

Between 1989 and 2022, inflation in the UK remained steady at an average of 2.6%. In July of 2022, that rate hit a record high of 10.1%, blowing all expectations about normal cost rises out of the water. If you’re concerned about what that means for your lifestyle, you’re definitely not alone! Across the world, people are worrying about counting pennies, cents, and dimes to make ends meet, and the fear is very real.

To ease your stress and make the cost of living crisis a bit easier, we’ve put together some useful tips that can actually help. Let’s dive into them now.

1. Create a (New) Budget

Budgeting is the first step to taking control of your finances. If you don’t already have a budget, it’s time to make one. For those of you who do have a budget, now could be a good time to create a new one that pulls your purse strings tighter, giving you more wriggle room and bolstering your savings.

To create a budget, first, outline your income. Include everything from your normal salary, any additional work you do, and any government financial help you receive. Then, list your necessary expenses. These include bills, food, and commuting expenses, for example. Allocate a portion of whatever’s left for your savings account, and the remaining money is your expendable income for meals out, clothes, and anything else that isn’t essential.

Money Planner has a free online budget planner tool which is super useful if you’re a budgeting newbie!

2. Switch Your Bank Account

This is a great time to take advantage of the financial perks of switching your bank. A lot of banks offer a monetary incentive for moving your funds, which can be a few hundred pounds if you’re lucky. Look into who’s offering the best benefits, too, including:

  • The best interest rates

  • Travel insurance

  • Cash-back perks

  • Discounts

Work out what’s most important to you. For example, if a bank offers a 10% discount for a shop you purchase from regularly, you could end up earning more money than if you opted for a higher interest rate account.

3. Consider an Equity Release Mortgage

If you’re over 55 and paying off a mortgage, consider taking advantage of an equity release mortgage. Through this, you can access money that’s tied up in your property, borrowing back the equity in the form of a loan that’s only repaid when the property is sold. You don’t have to worry about monthly repayments or debt collectors knocking at the door, making this a pretty safe way to access extra money. Usually, an equity release mortgage can be paid out in a lump sum or in smaller instalments.

4. Look at Different Service Provider Quotes

Service providers are always battling for your custom. If you haven’t shopped around for new quotes in a while, this is your sign to do so! From your energy and phone bill to your insurance provider, browse the internet to see if the prices you’re currently paying can be beaten. If they can, go back to your provider with evidence of the better price and see what they say. Sometimes, they’ll discount your bill just to keep you with them, and if they don’t, you know who to transfer your custom to.

5. Cancel Unnecessary Subscriptions

Go through your bank accounts and look out for unnecessary subscriptions. This could be a service you signed up for years ago and have forgotten about or something you’ve been paying a couple of quid a month for because it’s too much of a hassle to cancel. Put some time aside to find all of these wasted expenses and cancel them - no matter how tough the companies make it!

It may not seem like much, but these small monthly costs do add up. Don’t underestimate what cutting back a few pounds here and there can do for your monthly budget.

6. Earn Extra Income

Earning money from your talents isn’t difficult these days. If you have a hobby you enjoy, see if you could cash in on it. For example, if you love to write, you could look into doing the odd copywriting job for a startup business, or if you’re a dab hand at pottery, see if you can sell any of your creations on Etsy. Adding income to your budget is a surefire way to tackle to cost of living crisis.

7. Switch to Food Shopping Online

Food shopping online usually comes with an extra fee for delivery, but the money-saving perks could still make it a more budget-friendly option than shopping in-store. When shopping online, you can keep track of your spending. Watch exactly how much is going into your basket and stop when you reach your budget, ensuring you don’t get a nasty surprise at the till!

It’s also easier to see all of the discounted items online and compare them with unbranded alternatives. If a branded product is on sale, you can often still find it cheaper by looking at the supermarkets own range. Be diligent and you could save quite a lot on your weekly food shop simply by switching to online.

8. Seek Government Relief

The government does have some relief available for those who are struggling. If you think you might be eligible, make sure you sign up for Universal Credit, Tax Credits, and Pension Credits. Some of the programmes don’t give out very much, but even a small boost can help you through. Speak to a government official or financial advisor about your options, and take a look at the Citizens Advice informative page on how you can receive government help if you’re struggling.

Final Words

The rising cost of living isn’t something that many people are happy about, and billions are set to struggle over the coming months. We hope these tips will not only help ease your nerves but also give you actionable steps to make the crisis easier. Remember, economic downturns don’t last forever, and if you need help, be sure to talk to someone you trust.

About the Author

Gemma Williams works remotely from as many coffee shops as she can find. Gemma has gained experience in a number of HR roles but now turns her focus toward growing her personal brand, connecting with leading experts in the industry and providing value in topics related to career development. Connect with her on Twitter: @GemmaHartTweets