The months ahead look particularly gloomy when it comes to our finances, as we brace ourselves for a turbulent autumn and winter.
With rocketing food prices, soaring household bills, and just the general cost of living increasing, we’re all feeling the pinch at the moment.
But this is set to get even worse as we head into the latter half of the year – with energy bills due to rise again in October and inflation predicted to hit a 50-year high of 18.6% by end of January.
A tough winter ahead is looming.
While it’s perfectly natural to feel worried and anxious about what’s around the corner, the good news is there are a few things everyone can do now, to help get their homes and finances in the best position possible.
We’ve asked experts to share some actions to take right now to prepare for the coming months.
Get on top of any debts
Victor Trokoudes, CEO and co-founder of Plum, explains that – with interest rates set to rise again – it’s more important than ever to get on top of any debts, especially if they already have high-interest.
He says: ‘The Bank of England’s interest rate influences short-term lending on things like credit cards, and given the growing economic uncertainty, your credit card repayments could go up due to higher interest.
‘When you’ve paid off any debt, you’ll have more room in your budget for other things, like growing your emergency fund or simply paying bills in the face of rising prices.
‘Otherwise, you may want to consider moving your debt to a cheaper rate. If you have a higher credit score, you’ll likely have more options open to you but moving your debt to a 0% credit card or a personal loan on a cheaper interest rate could be a good option.
‘That means you can use more of your finances to pay down the actual debt each month rather than just paying off the interest.’
Review your expenses and budget
The word ‘budget’ has been thrown around a lot the past few months – but making a monthly financial plan and regularly reviewing your expenses really will help lessen anxiety and make you feel more in control.
Victor says: ‘Take a look at where you can cut back on spending. Scan your outgoings and make note of anything you’re not making full use of. That means trying to cut down on non-essential spending, like entertainment, dining out and clothing.
‘To help you do this, put together a budget. So many of us don’t have an idea of what we’re spending and on what.
‘You can then cancel the outgoings that are no longer must-haves, and downgrade the ones you don’t use to their full potential — that could mean moving to a basic tier of gym membership, or switching to a SIM-only deal on a phone contract that’s run its term.
‘While it’s not realistic to think you can cut out all non-essential spending, it’s important to separate what you want from what you really need.’
There are plenty of budgeting apps which might be able to help you do this. Or you can always make your own manual one using a spreadsheet.
Compare bills
‘Loyalty is costly to consumers, but let’s face it – most people would rather live their lives than spend time scouting for better deals and keeping on top of financial admin,’ says Victor.
But it’s super important to shop around for better deals – and lots of comparison websites can help you do this.
Check your tax breaks
Victor also adds it’s vital you make sure you take advantage of all the tax breaks that are available to you.
‘These could make a very big difference, especially over the coming months with energy bills set to rocket and inflation already in double digits,’ he adds.
‘For example, the Government provides support with childcare costs, up to £2,000 for each child per year. With childcare costs in the UK among the highest in Europe, this is one tax break parents can’t afford to be missing out on.’
Victor says another popular tax break is the Marriage Allowance which lets you transfer £1,260 of your personal tax allowance to your husband, wife or civil partner. This reduces their tax by up to £252 in the tax year.
Insulate your home
Tip top insulation is a great way to ensure your home stays warm during the chillier months – without turning up the heating.
‘It is a good idea to act now on looking at ways to reduce upcoming heating bills, and that includes considering how to make your home more energy efficient,’ says Jenny Turner from Insulation Express.
‘A staggering 25% of heat loss occurs through the roof in a poorly insulated property, and that is making your boiler work harder, costing you more money. For those eligible, there are government grants available to help with insulation costs.
‘A boiler jacket can also be a great investment as an extra layer of heat-trapping when the boiler is in use this winter.’
Another way to prevent heat from disappearing in the home is to find and tackle cold and draughty spots.
Jenny adds: ‘Draughts account for 15% of heat loss, so use window sealant or caulking to go round windows and doors to cover up any gaps where cold air could be getting in.
‘Use draught excluders at the bottom of the doors when the colder weather comes, and hang thermal curtains at windows and inside of external doorways to help trap heat.’
Take advantage of loyalty schemes
‘Loyalty schemes can be seen as a hassle before you have signed up, but once you use one for a significant amount of time, some of the discounts and offers are fantastic,’ says Sam Whillance, an expert at money-saving site Deal Town.
Check out options such as Tesco Clubcard, myLidl, Pret, Boots and other retailers that allow customers to build points – and benefit from money off and vouchers.
Sign up now and reap the freebies over the coming months.
Change to more energy efficient lightbulbs.
Heating and lighting are the two main costs for energy in most homes, says Ben Howarth, the founder and managing director of Howarth Housing Group.
‘While most people have already changed over to LED bulbs, they are not all created equal. LED bulbs have an energy efficiency rating and changing to newer, more energy efficient bulbs can add to the cost saving,’ he explains.
‘Also don’t neglect your light fittings. Some older spotlight fittings that were originally designed for halogen bulbs actually draw more power than they need then dispel the excess.
‘This is because they were designed to draw far more energy than an LED bulb requires.’
Cancel those subscriptions
Cut back on any subscriptions you don’t feel like you use enough, or even limit the ones you have for certain categories.
For example, do you really need Netflix, Disney Plus, Amazon Prime and Hulu?
Ben says: ‘Most online streaming services show about 90% of the same films and shows, they usually only have a few programmes which are specific to them so, if you don’t use it regularly, cancel it.
‘That can often save £50-£60 a month in total so it’s a big saving for something you may only use once a month.
‘Also, if you have Sky or Virgin look at your package. Often you may have extra packages you don’t use anymore such as kid’s channels or sports which may have been offered cheap initially but are now full price. If you don’t use it, get rid of it.’
Invest in an electric blanket
A good energy-saving mantra to follow is to heat the person, not the room.
Pete Mugleston, a money expert at Online Money Advisor, recommends investing in an electric blanket for winter – but be savvy with this.
He says: ‘Using a low wattage electric blanket can keep your heating costs to a minimum, and they use much less energy than radiators or portable heaters.
‘That being said, it’s important to understand the cost of operating an electric blanket before deciding to buy one – make sure you look out for blankets that have lots of heat settings, timers and dual controls.
‘When using your electric blanket, be sure to set the timer to heat it up beforehand and choose a lower heat that will use less energy.’
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