How to cope with a higher cost of living
BY Andy Webb
29th Jan 2022 Managing your Money
With winter bills soaring, Andy Webb has a plan on how to best mitigate any financial damage
From record petrol pump prices and surging energy bills to sizable supermarket spends and costlier clothes, the last few months of 2022 saw big jumps in how much we pay for things. And I’m afraid that’s likely to continue in 2023.
But don’t panic (too much). There are ways you can find savings and boost your budget. Combined these should minimise some of the damage to your bank balance caused by creeping inflation.
Give some or all of these a go and you’ll hopefully manage much better.
Shop around
I use online tools to help me find the lowest price. For everyday purchases there’s PriceSpy. It’s essentially a price comparison site, but I love the feature to see the recent price history - helping me work out if there could be a discount around the corner.
Downshift brands
If you’re always buying the leading brands at the supermarket, give some own brand alternatives a whirl. Often similar products are made at the same factories and while they might not taste exactly the same, the money saved might be incentive enough to make the change.
You could also look to change supermarket completely, with some of the discounters offering much lower prices than you’re used to.
Earn cashback
Everytime you shop online go via either Quidco or TopCashback. These cashback websites will earn a small commission on your purchases, and then pass most of that back to you.
You can double down on this with a cashback debit or credit card. Chase Bank UK offers 1% for 12 months on purchases via it’s current account, while American Express welcome offers can be worth 5% or more for the first three months.
Get the best interest rates
Though it might seem there’s no point comparing rates on savings, there are accounts available that’ll significantly boost what you make in a year. Head to Be Clever With Your Cash for the highest paying ones.
It’s also worth seeing if you can lower what you pay on your mortgage. If interest rates rise significantly this year, we’ll see the end to the record low home loans. Make sure you factor in any exit fees on your current mortgage and arrangement charges on new ones when you’re comparing deals.
Stop overpaying on your bills
Some of the biggest costs every month are ones we think we can’t go without—broadband, TV and mobile phone bills. As long as you are out of contract you should be able to downgrade and pay less.
Mobile phone data is one of the worst here. Check your account online to see how much you actually use each month and choose a SIM which is closest to that.
Similarly, if you find you’re mainly watching channels such as BBC, ITV and Channel 4, then you could look to scrap pay TV subscriptions—even if it’s just for the short term,
Use what you’ve got
Take an hour to have a look at what’s lurking at the back of cupboards around your home. There could be clothes, food and gadgets that you’ve forgotten about but are all perfectly good to use—and they might mean you don’t need to buy anything new. Even items that need some TLC could prove cheaper to mend than replace.
Take the same approach to your wallet. Search for gift cards, credit on bills and old accounts that could provide some fresh spending money.
"Take an hour to have a look at what’s lurking at the back of cupboards around your home"
Find out if you are entitled to any help
Head to sites such as Entitled To and Turn2Us to see if you can claim any benefits or grants that could boost your income.
Cut back where you can
If everything is more expensive, then it stands to reason that you’ll probably also need to cut back in places. When you’re shopping, consider whether the item is a “need” or a “want”. If you don’t need it then it might be time to give it a miss—or look for a cheaper alternative.
You don’t need to drop all your luxuries—unless you can’t afford them of course. But spending less on these will mean you have more cash available for the essentials like food and heating.
Read more: 11 Ways to keep home energy bills down
Read more: What high inflation means for you
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