Cost of living crisis: Brits face 'painful winter' warns expert
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Alice Haine, a personal finance analyst from Bestinvest also began to worry about the cost of living towards the end of last year. She then sat down on a wet Saturday afternoon and went through her household expenses to work out how she could reduce it.
Ms Haine said: “The aim of the exercise was to make sure we could meet all our monthly bills, still have enough to save and invest every month and also have a little left spare for those miscellaneous expenses that crop up every month.”
Ms Haine managed to create a plan which helped her shave off around £900 from her family’s monthly expenditure and has come up with an 11-points which can help others do the same.
She said: “The one expense that stood out above the others was the cost of food. Over the course of 2021, I watched the food bills for a family of four creep up from around £100 a week to between £150 to £200 a week on average.”
Ms Haine set herself a budget of £400 a month for food and the first thing she did was swapped out brands to supermarket own-label products for things such as fruit squash which her children were “not a fan of” at first.
She also recommends people scan all of the shelves for offers and not just the ones at head height, as well as always checking the reduced section for food which is close to their sell by dates.
Other tricks included using the supermarket’s app and scanner so that she could see the amount totting up as she went around the store. Overall, Ms Haine managed to shave off around £174 a month by shopping this way.
Another area was food waste, Ms Haine said that she only bought what she needed rather than stocked up so she could limit the amount she wasted.
She also took to bulk cooking meals which meant that dishes could be separated and frozen. By doing this an average person could save around £60 a month.
Ms Haine added: “We now have a leftover day every week to ensure any uneaten food does not go to waste! I now see the food on my shelves and my fridge as cash that needs to be consumed rather than discarded.”
With energy costs, Ms Haine highlighted that this was something that was the main concern for people. Her techniques for cutting energy costs help her save around £31 a month and mainly consisted of small daily actions.
Things such as switching off devices rather than leaving them on standby, turning off lights in rooms not being used, washing full loads of clothes at 30 degrees, avoiding using the tumble dryer, taking four-minute hot showers, and not overfilling the kettle can help save between £14 to £70 for each step.
With car and home insurance, Ms Haine said that people should not auto-renew without doing research first as there are always “better quotes” out there and there are “definitely savings to be made”.
Ms Haine managed to save £80 on her home insurance however said that savings could be up to £310 annually or £25 a month if a person can find the right deal.
She also added that people should think about their driving habits now compared to before the COVID-19 pandemic, and does a person really need the same cover as before.
Some price comparison websites are claiming to offer savings of around £153 a year or £12.75 a month.
With fuel, Ms Haine said that people should note the journeys they take each week and plan where they can fill their petrol tank up. This is because supermarkets tend to offer the lowest rates compared to service stations.
Ensuring that car boots are not filled with heavy clutter and that journeys are “smoother” rather than “putting your foot down” are also ways the reduce fuel consumption by around £18 a month.
Shopping around is the common theme of this list, as to cut down on the cost of TV and broadband Ms Haines suggests moving away from the “Big Four” providers in order to find a more cost-effective.
The same stands with monthly subscriptions. On their own, they don’t account for much but altogether it can have a big hit on a person’s monthly finances especially if they’re small subscriptions which are unnoticeable.
Ms Haine said: “By scouring my bank statements I managed to ensure any unused subscriptions were cut out. I found one for a scanner app I had used a couple of times last summer that was deducting a sum every month.
“As a family, we also discussed all the TV streaming sites we are signed up for and decided which ones we actually used often and needed.”
By doing this, Ms Haine managed to cut around £30 off her monthly bills.
If a person has multiple NHS prescriptions then Ms Haine recommends checking out whether purchasing a prescription prepayment certificate (PPC) would work out cheaper as it’s “effectively a season ticket for prescriptions”.
Mr Haine also recommends that people think about their bad habits and impulse purchases.
Habits like smoking can cost the average person around £2,306.80 a year and by cutting the habit a person could potentially save £192.23 a month.
For impulse spending, Ms Haine said that people need to be making “conscious decisions about spending”.
She said: “People should question whether they really need something, if they don’t need it but want it, they should give it 24 hours to decide.”
People could also make use of loyalty care schemes with Ms Haines stating that she has got one for every supermarket and pharmacy she goes to.
She said: “With loyalty cards, I feel I am getting something back for my spending. Over time you build up points and then can use those token amounts for small purchases.”
Other areas which people are struggling with, such as mortgage rates, is a harder area to navigate. With many people on fixed-rate deals, many won’t feel the pinch just yet.
However, Ms Haine warns that when it comes time to renew, switching to another deal can help save hundreds. Otherwise, lenders will put them onto their Standard Variable Rate (SVR) which is often much higher than the lender’s introductory rate.
By taking these steps, Ms Haine said that people could have to ability to possibly save around £900, or at least a few hundred, on their monthly spending which could really help people who are struggling to stay afloat.
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