Rising inflation and economic uncertainty have left many people struggling to make ends meet. Necessity is, however, known for being the mother of invention. With that in mind, here are some tips for beating the cost of living crisis.
Work on your budgeting skills
You’re probably already familiar with the basics of household budgeting. You list all your income and all your expenses. If you are confident you have enough income to cover your expenses, you can stop there. If you’re not, you need to take steps to address the situation.
If you really want to beat the cost of living crisis, however, you need to think more like a business. For example, you may already categorise your expenses into high-level categories such as essential and discretionary.
You should take this further and categorise your expenses according to the role they play in your life (e.g. housing, food, transport etc). If an expense goes into more than one category, then split the cost accordingly. For example, if you use a mobile phone for both work and your personal life, split the cost of it between the two categories.
This will let you see which areas of your life generate the highest costs. These should generally be your priority areas to work on.
Find an effective way to track your spending
You need to track your spending to know where your money is really going. Usually, your starting point is to keep all of your receipts. If you don’t get a receipt, make a note of the purchase details (what you bought, where and when plus the price). A text or voice note on your phone is often the easiest way to do this.
Then, enter your data into some form of a tracker. This could be a spreadsheet or a proper budget app. Alternatively, it could be an old-school paper notebook. It could even be a combination of these. Do whatever works for you.
Look for ways to increase your income
When you’re thinking about ways to beat the cost of living crisis, possibly the first thought that comes to you is to find ways to save money. That’s perfectly valid and there’s a strong chance you’ll need (or want) to do that. It can, however, be smart to start by looking for ways to increase your income.
If you’re in work, it can be worth checking to see if there is a chance of extra money through your usual employment. If you’re not, or there isn’t, or the options don’t suit you (e.g. for childcare), then there are other possibilities.
The first is to set up a side-hustle. This will require you to set up as self-employed and file a tax return. The extra income can, however, be worth it. Also, one of the benefits of being self-employed is that you set your own hours. This can be really useful if you have to fit your side-hustle around other commitments (e.g. childcare).
The other is to make sure that you’re claiming all the government support you can. Even if you’re not eligible for benefits, you may qualify for other forms of support (e.g. free childcare). Keep an eye on both the national and your local news. National news will cover ad hoc assistance from the central government. Local news will let you know about any help being offered in your area.
Actively look for local money-saving resources
If you are feeling the cost-of-living crisis then you are definitely not alone right now. The upside of this is that a lot of organisations, groups and individuals are stepping up to help. Many of these work at a local level. What’s more, they may not be widely advertised. That means you need to make some time to look for resources that could help you.
