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There's no denying that the current rate of inflation, at an all-time high of over 10 per cent, is squeezing all of us, except those at the very top of the financial food chain. The cost of living crisis is having an impact across almost all areas of our lives, from forcing us to stay in relationships that have run their course to contributing to a decline in our mental health and forcing many of us to make decisions between eating and heating on any given day.
Of course, whenever money is tight, it's the luxuries that are the first to go. Perhaps for you that means your yearly holiday, your manicure habit or those extra few drinks on a Friday night. In the past, cutting back on these extra expenses - no matter how well-deserved (and they are) - would go some way to helping us reign in our financial situation and feel a little more at ease. But for many, that simply isn't the case anymore. Enter: inflation creep.
Unlike ‘lifestyle creep’ - as I mentioned above, the idea that our lifestyle begins to creep up on us, meaning we must curb excessive spending to make ends meet - ‘inflation creep’ refers to the loss of purchasing power over time. In short, it happens to us, rather than because of our spending habits, and has a profound impact on what we are able to afford.
Over half of UK couples admit they feel friction in their relationships because of the cost of living crisis.
For example, paying your rent, bills, daily commute and car tax might have been something you were able to afford with no problem a year or so ago, but now, those same things have increased in cost so much, your earnings can no longer really match up, even though you haven't changed your spending habits. Or, in day-to-day terms, if you bought soup for £1 a year ago and today it costs you £2.50, that's inflation creep. You haven't upgraded your soup choice, your soup choice has upgraded in price. It's stressful, it's life-limiting and it's causing more and more people to feel a sense of impending doom.
The good news is that just because inflation creep isn't your fault, that doesn't mean there's nothing you can do about it. We spoke to Sam Covington, a finance expert from Finbri, about the things we can do to help ease the impending sense of dread and ease up our bank accounts. We're not saying you're four steps away from a luxury holiday in the Maldives, but every little helps right?
Shop around for everything
"Write a list of your outgoings, start with the big ticket items first… so that’s home insurance, car insurance, energy, loans, mobile phone, broadband, food shopping down to leisure items like your Netflix subscriptions. Common-sense check to first make sure you 100% do need it and if you do then price check it.
“If the same product can be found cheaper elsewhere then why not switch? If you’re feeling a bit more brave then consider where you live. If you’re renting, is it possible to downsize or relocate to a less popular postcode which could translate into cheaper rent.”
Remember, everyone is in the same position.
“Households earning as much as 55K a year are impacted by current inflation rates and the cost of living crisis. At the moment, energy bills are taking a hefty chunk of the UKs monthly salary but as the warmer months approach, these will inevitably drop. This will aid in your remedying your disposable income without you having to do a thing.”
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Pay in cash if you can
“‘Generation contactless’, may not be aware of just how much they are spending as its difficult to keep track. Cash is such a tangible way of purchasing it urges a spender to really think about what they are spending. Working in this way aids in taking back control of your bank balance.”
Don’t be fearful of money
“4% of the UK never check their balance. This is often because they are scared of what will be looking back at them. Taking full control of your outgoings is empowering and will naturally ease your worries towards he inflation creep.”
