How To Manage Your Finances Better During The Cost Of Living Crisis

The cost of living has increased rapidly over the last year. It is something we were pre-warned of. Nevertheless, it has still surprised many people the cost of certain items – guest post from Rose Morley

 
Household essentials have increased in price as well as our utility bills. Following the repercussions of colder months, people are still struggling with their bills and necessities they cannot afford.

Managing your finances is extremely difficult for some people, especially if they have a low income. However, the cost of living crisis may have tipped them over the edge, causing them to be in debt or remortgage their homes. Nonetheless, there are many ways to reduce your debt so you can invest.

If you struggle with personal finances, there are several things you can do to ensure you pay your bills on time.
 

Create A Budget Plan

 
Firstly, if you haven’t already, create a budget plan. This budget plan will have all your expenses, including monthly outgoings such as utility and food bills. This should also include your monthly subscriptions such as Spotify, Netflix, Now TV and any other subscriptions you pay for. However, you should also incorporate other expenses such as going out at the weekend for a meal or drinks with friends. All of those expenses should be in one place.

Some people would prefer to write this down in a notebook. Others would put all of their expenses on a spreadsheet. However, there are many apps out there that do the hard work for you. Apps such as Emma, Plum, Good Budget, Spending Tracker and many more are great budgeting apps.

A standard budgeting method which financial experts suggest is the 50-30-20 rule. For those that don’t know what that is, it is where you spend 50% of your income on the necessities. This includes utility bills, WiFi, Food bills, petrol, mortgage and anything else you must pay. The 30% should be on things you do to enjoy life such as the cinema, watching your favourite sports team, buying a new video game, clothes or anything else that isn’t a necessity. Finally, the 20% is where you would put this into a savings account or invest your money into stocks and shares.

A budget plan is to keep on track of your outgoings and what comes into your back. Once you create a budget plan, you will cope better.
 

What Do You Spend The Most Money On?

 
Identifying what you spend the most of your money on each weekend. This could be many things such as going out with your friends or spending too much on clothes. Whatever you spend most of your money on, try to reduce the amount you spend. For some people, they would have triggering points and usually that is when the clock strikes five on Friday. Other people might spend money when they are bored. Similar to those who eat food because they have nothing to do.

Identifying your spending triggers is another step to managing your finances. It is something everybody needs to identify when they have poor spending habits. Furthermore, buying things to make you happy will only be temporary. Get out of the routine of spending money when you feel low to keep on track with your budgeting.
 

Haggle Broadband and TV Providers

 
Something that gradually increases over time is internet and television subscriptions such as Sky. It seems prices increase when you get a new contract or during the existing contract.

Increased prices from these providers can go unnoticed. Check your bills from these companies regularly because they will send you a letter to tell you they are increasing.

With these providers, you can reduce the bills if you request them. However, they give these away easily so you have to be smart with your negotiations. Give them a valid reason why you cannot afford it and it cannot be reduced then you will have to cancel it. They will offer alternatives so they keep you on board with their service. Remember, getting some money from you is better than no money.
 

Sell Your Unwanted Items

 
Although this is only a temporary fix, it can give you some financial freedom whilst you get on top of things. For one month, it will relax your financial stress and leave you with money to spare. It will then have a domino effect on the following month if you stick to your budget plan.

It is easy to sell unwanted clothes or furniture in this day and age. Especially when you have platforms available to you for free such as eBay, Vinted, Depop, Music Magpie and Facebook marketplace. All you need to do is research what people are selling your item then sell it for roughly the same price, depending on the condition.
 

What To Do If You Are In Financial Trouble?

 
Sometimes financial trouble can not be helped. Something may have cropped up during the month such as your car breaking down or boiler. There are so many things that can go wrong in

life and they could set you back. However, if the cost of living crisis has become too much for you, there are a few things you can do.

Before you do anything, we advise you to seek extra help. If you claim benefits, you might be able to get them increased. Make sure to check what benefits you can receive and see if you can get any additional help.
 

Local Council

 
Another thing you can do is contact your local council to see if you can reduce your energy bills. You also reduce your council tax if you are a single occupant. Other essentials you can receive support include food, clothes and many more.
 

Debt Troubles

 
If you have an overdraft on your bank card that you cannot pay, you might be able to get assistance with it. Contact your bank to see if you can get your interest reduced or cancelled. This will help reduce your financial stress and deal with your other expenses.

We also advise that if you ever are considering borrowing money for your expenses, you need to check and see if they are FCA registered.

Sometimes, getting into debt cannot be helped and sometimes are unable to pay it off because the interest is too high. If financial problems do arise, it can be a slippery slope which is why you should seek financial help. Furthermore, debt can be reduced by debt consolidators using an IVA calculator. They will see how much you owe and work out how much you can get reduced.