Inflation has now escalated to 9 per cent and the prospect of hitting double digits by the end of the year is looking ever more likely. Energy, food and fuel prices are partly to blame for inflation increasing to its highest point in years with consumers now facing the reality that the cost of living crisis is set to continue for some time.
As opposed to guessing your income and expenditure, gather your credit card and banking statements together along with any regular bills and add up exactly where your money goes. An easy way to see all your regular payments is to check the direct debit and standing order lists on your bank account, while the rest of your statements will flag up other ad hoc spends on petrol, food and going out.
However, there are simple steps that help cut everyday spending and protect finances as much as possible. With this in mind we have You can note this down on a piece of paper, put together some simple tips you can take to in a word document or on a spreadsheet. For a simpler solution, use a free, online planner cut your spending over the next few weeks. or a budgeting app such as Money DashSo lets crack on with the first helpful step you board or Emma. can do. Work out precisely what you earn by checking payslips to confirm the amount that hits Create a budget It’s the oldest rule in the book. The first thing your bank account after tax, national insurance and pension contributions have been to do when looking to cut costs is to create taken out. an effective budget. To do so, write down your short, medium and long-term goals to Remember to include everything from your fully understand how to make your money food shopping and regular bills, to mortgage work harder for you. or rent costs, savings and investments, including pension contributions, and debt A short-term goal might be paying off your repayments. debt or going on holiday, while a medium-term goal could be saving for a wedding, buying a house or funding your child’s univer- Don’t forget to include one-off outlays sity education. Your long-term goal would be whether it’s an annual car or house insurance retirement and ensuring you have enough set payment, a holiday, a new piece of furniture for the house or Christmas presents. Take aside to fund all your expenditure after you the total figure and divide it by 12 to get the have stopped working. monthly outlay.
42
