Weathering the financial storm

Advice to get you through the cost-of-living crisis

Things are getting serious when it comes to money. Inflation is the highest in 40 years and interest rates are rising in an attempt to stop it, so our mortgages and debts cost us more.

Energy and fuel prices have increased and we can expect a further rise in our electricity bills in October, just when we’ll be starting to put our lights and heating on more frequently.

We’ve also seen a rise in taxation with the introduction of the Health and Social Care National Insurance levy, meaning many of us are taking home less money each month.

We are all feeling the pinch, so it’s essential you know your numbers when it comes to ALIE – assets, liabilities, income and expenditure.

Get organised

Make a list of all the money coming in and going out every month so you know where you stand.

You might even find direct debits for things you stopped using long ago.

Also remember to look through your credit card statements for regular payments that can often be missed.

Next, look at what you owe and what you own. If you’ve got outstanding debts, write them down.

Make sure you’re on the lowest interest rate you can get by contacting any credit card providers.

It’s very likely that we will see more interest rate rises, therefore your borrowing costs will also increase. Take this opportunity to review the market and consider a fixed rate for your mortgage.

Finally, don’t forget to organise what you own, including which companies your pensions are held with.

Cut outgoings

Go through each item of expenditure and ask yourself three things: Do I need this? Do I want this? Can I get a similar experience for less?

Unless you plan to rely on savings, you’ve simply got to have more coming in than going out. If you’re taking a financial hit at the moment, that might mean making tough choices and some cuts you don’t want to make.

Your TV subscriptions might need downgrading, for example, or that phone upgrade might have to wait. Also consider reviewing your energy bill and fuel costs. I have fixed my electricity price and have a tariff that gives me a discount in the evening. This is when we’ve agreed to put items such as the washing machine on.

We’ve also invested into a timer plug that switches on when the discounted rate applies to charge all our devices.

Increase income

Think about ways you can improve your earnings. Thanks to the likes of eBay and Facebook, it’s never been easier to sell unwanted items online – and if my 15-year-old daughter can sell unwanted clothes on Vinted and Depop, I am sure you can too.

If you’re on a modest income, are out of work or have children, it may be worth visiting entitledto.co.uk to see if you are eligible for any benefits. You might be surprised.

Also consider any online training to improve your salary in the future, or return to full-time education with the help of an Advanced Learner Loan.

If you already have a skill, consider selling it by setting up a side-hustle on sites like Fiverr.com or upwork.com.

Armed with information, you can improve your financial position and make it through the storm.

For more money planning ideas search for the Warren Shute CFP YouTube channel.

Many of us are taking home less money so we are all feeling the pinch