Inflation rates in the UK have reached a 30-year high and led to a drastic increase in the cost of living, causing many regular and necessary expenses to have risen substantially in recent months. For example, petrol prices rose 12.6p per litre between February and March. This represented the largest monthly increase since recordkeeping began in 1990.
The Office for National Statistics (ONS) calculates inflation rates by analysing the prices of hundreds of commonly used goods. This collection of items is known as the “basket of goods” and is updated regularly to reflect market trends.
In the year leading up to March 2022, inflation rose by 7 per cent. In addition to that alarming figure, it’s possible that prices will rise at even greater rates in specific sectors. Some business leaders have said that the cost of food could increase by as much as 15 per cent this year, for instance.
Given the historical severity of rising prices and their inevitable impact on the financial well-being of Britons, it’s necessary to consider how you can save on everyday costs.
Strategies for Saving
While attempting to cope with current economic conditions, consider the following steps:
- Create a budget. Organising various expenses can make you more aware of your spending habits and help guide you if you must make difficult decisions. Composing a budget may make it easier for you to prioritise necessities and avoid frivolous spending on non-essentials.
- Cut back. After analysing spending habits, consider which expenses and purchases are necessary and which are not. An essential part of adapting to financially difficult times is reducing spending on expendable purchases. For example, pausing or cancelling subscriptions or memberships that you rarely use may help save money every month.
- Research rewards programmes. Many products and services offer loyalty or membership rewards programmes. These may include benefits such as discounts or even free goods. Take time to research rewards programmes for places or services that represent frequent expenditures for you, such as petrol stations and supermarkets.
- Search for discounts. Finding the lowest prices and best deals on goods and services can make a large difference in your financial situation. This may mean comparing prices at different shops or taking the time to find coupons.
- Make essentials last longer. As prices for necessary products like petrol and food rise, consider how to make the most of them. Some ways to reduce fuel consumption include cleaning out your car to reduce its weight, allowing the engine to warm up, accelerating and braking gently and using heating and air conditioning less. Additionally, you can avoid wasting food by making a weekly meal plan and changing produce storage habits.
- Invest appropriately. When inflation rates are high, the right investments may be able to benefit your financial situation. But, it’s important to be cautious when considering investing your money. As such, consult a financial adviser regarding your financial standing and investment goals.
- Find free fun. Activities and entertainment can be very expensive. Try to find alternatives that may cost less or even be free. For example, attending community events, spending time with friends at home rather than at the pub and enjoying public parks may all be helpful for saving money.
- Talk to your employer. There may be a number of ways for employers to help workers during difficult times. For example, organisations may allow you to work from home to reduce travel costs or accommodate flexible hours to decrease childcare expenses. It may also be helpful to contact HR and review potentially helpful benefits programmes.
It’s important to note that financial struggles can also lead to mental and physical health issues. Therefore, as people across the UK continue to cope with high inflation rates, it’s imperative to consider all possible steps to limit and manage financial hardship.
Contact your supervisor or human resources if you have any questions or to receive additional employee well-being resources.