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money pay squeezed header

Making your money go further when your pay is being squeezed

Pay continues to be squeezed for many workers up and down the country as inflation rises and wages stagnate. Recent data points to tightening household finances prompting warnings from debt charities and the Bank of England of tough times ahead for many.

As disposable incomes shrink, there is also a worry that affordability for paying back consumer debt could fall. This could lead to further personal insolvencies and court action from creditors, both of which have been on the rise lately.

Although workers’ wages have been stagnant on the whole since the financial crash of 2007, staff are currently facing the largest real-terms cut in take-home pay since early 2014. Inflation recently rose to 2.7% with pay growth stuck at around 2%, showcasing the widening gap between the pay we take home every month and price of the products we buy on a weekly/monthly basis.

All this comes just weeks after significant rises to household bills as energy costs rise again, council tax rose above inflation and water bills have increased. As the average household budget is stretched further and further, you will have to be more inventive and money savvy in order to make your income go further.

We have put together 10 tips to get the most out of your money and cut household costs to deal with the effects of the rise in inflation.

Budget

If you don’t already have a budget, create one for your household finances to manage spending and plan for the month ahead based on the money you have. Budgets are useful for spotting areas of overspending or any unused subscriptions and memberships which can be cancelled which can help you to cut back so it can be worth taking time to create a budget for your household. There are budgeting apps available, such as You Need A Budget and GoodBudget, which can help track your spending and create savings targets on the go.

Prioritise bills and necessary purchases over anything else

When you make your budget, a main priority should be your monthly bills and any necessary purchases/payments such as debt repayments and food bills. The budget will show you if you have enough money to pay these giving you a much clearer idea of how much money you have left at the end of the month. You can then decide how you can best use this for you and your household by either using it to pay off your debts, start or add some money to a savings account or treat yourself.

Make the minimum repayments on any debts

A very important consideration to keep in mind is that any debt you have, from your mortgage to your credit card, needs to be paid off every month. As a result, these kind of payments are very important as they can easily become problematic if payments are missed. However, if you are struggling with debt repayments, we can provide you with the help and advice you will need.

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Cut back where you can

Where possible cut back on your household’s monthly outgoings by cutting back on the amount of food you buy a month, turning the heating on less or making things in your house last longer. When it comes to food, which is a big expense and area of financial waste, you can save some money by looking at cutting back food wastage and going shopping with a list and sticking to it so you only buy what you need. You could also buy own brand products which are cheaper than branded alternatives and cook more meals from scratch which works out cheaper than regularly buying ready meals.

Look into switching providers

One of the best ways to save a significant amount of money is to switch your energy, insurance or entertainment providers. Some bills you are tied into and have no control over, such as council tax and water, but you can change your energy or insurance provider as well as who provides your TV, phone or internet. Compare the market and shop around for the best prices on packages that suit your needs and save you money.

Make use of vouchers and coupons

These can help you save money on monthly purchases or on occasional treats like meals out or weekends away. They are very useful and popular and as a result there are many sites and apps out there which collate all the best deals for you to make use of.

It is also worth becoming a member of stores you shop at regularly as loyalty cards and e-newsletters can provide you with a great way of saving money on your purchases.

Try to make do and mend where possible

If you can, make do and mend. This war time slogan can be just as beneficial for those who are just about managing with their monthly wages. Fixing everything from your toaster to clothing and making use of the crafting/upcycling trend will not only save you money but it will give you a sense of accomplishment especially when it comes to fixing something you thought was broken. However make sure you are safe when it comes to fixing anything to do with electrics or water and if you are unsure, call a professional.

Get cashback

Many bank accounts now offer cashback on the purchases you make. Simply pay by card in store on online with certain retailers and you will earn cashback at the end of the month paid straight into your account. It is not something that works for everyone but it is worth exploring with your bank.

There are also some cashback sites on the web where you can click through their website to a retailers/product provider’s website and buy your product. By doing it this way, you can earn cashback and get paid for your purchases but make sure the sites you are using are verified and be careful when giving out any card or bank details to or via these sites.

Buy in bulk and don’t waste

This is particularly good when it comes to cutting back on your food bills without cutting down on the amount of food you are buying. It can be more expensive upfront but in the long run it will save you money per meal/serving. Also, make the most out of every food item and look for ways to use up all your perishable leftovers with ideas including omelettes, stews and banana breads.

Make your own fun

Saving money and cutting back usually means getting rid of and avoiding social events and treats which can be quite dispiriting. However, there are ways you can make your own fun from crafting to inviting your mates round for a night in, there are ways you can have fun on a budget. For families in particular, scour the internet for fun/cultural things to do in your town or city for free as well as making use of family day out vouchers.

If you are struggling to manage your money or you have debts that you cannot afford to repay, get in touch with us on XXXXXXXXXXXX and our friendly, confidential advisers will provide you with all the information and help you need.

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