How to Protect Your Savings as Living Costs Soar
With inflation currently at its highest rate in 30 years, many of us are feeling the pressure in our pockets and relying on our savings to make ends meet.
In fact, a study by Tesco Bank shows that one in ten people regularly need to dip into their savings, and savers are withdrawing £118 per month on average to meet their living costs.
However, there are some steps you can take to make your money go further as the price of everything from food and energy to broadband and petrol continues to rise.
Review your spending habits
How much money do you spend on items you don’t really need, such as subscriptions for services you barely use or a takeaway hot drink whenever you’re out and about?
If you’re struggling or having to resort to dipping into your savings to cover basic living costs, it’s time to look at where you might be spending unnecessarily.
That doesn’t mean you have to live without luxuries or cut discretionary spending completely. Just commit to reducing the amount by a set figure – perhaps five per cent – and you’ll free up money that can be used on essentials elsewhere.
At the same time, change your approach to purchasing those necessities, such as food. For instance, are there non-branded alternatives to your regular purchases in your local supermarket? Are there any multibuy promotions that may offer better value, or could you use coupons and loyalty programmes to cut your bill? And before you go to the supermarket, write a list and stick to it, so you don’t run the risk of spending too much.
As part of your review of your spending habits, take a look at how much you’re paying for basic utilities as well. There’s money to be saved if you put your heating on a timer, turn your thermostat down slightly – perhaps just by a degree or two – and avoid leaving electrical appliances on standby when they’re not being used.
Don’t get caught out by fees and price hikes
Many organisations can hit you with extra charges if you don’t have your eye on the ball. For example, you could be charged fees by your bank if you don’t repay what you owe on your credit card on time or exceed your overdraft limit.
So make sure you’re on top of any deadlines and imposed limits so you don’t get caught out.
Meanwhile, check you’re not being penalised for staying loyal with service providers, such as broadband firms and insurance companies. Many will offer generous introductory rates for a set period, but when that time has elapsed, you’ll be put on a higher, standard rate, often without being informed.
It’s a good idea to diarize when these special deals expire and contact your service provider before this date. Simply calling up and asking could lead to you being put on a much better plan, which could save you large sums of money.
The price of subscription services such as TV streaming platforms can also go up as time passes, so it’s well worth looking at what you’re being charged. If you have several subscriptions in place and prices have gone up across the board, ask yourself whether you really need them all right now. Cancelling just one subscription that you don’t need could yield healthy savings further down the line.
Research the financial services market for better deals
No two financial services providers are exactly the same, so shop around for institutions that pay higher interest rates on your savings or savings accounts that offer attractive perks, even if just for a set period of time.
Calculate your personal inflation rate
While the official UK inflation rate rose by seven per cent in the year to March, many of us will rightly feel the cost of living has actually gone up by a much higher rate.
You could find out how much your own personal costs have gone up by looking at how much the price of everyday items you buy, from a pint of milk to a tank of petrol, has changed over the last 12 months.
That would help you work out exactly where your costs are going up as an individual and exactly where you could change your behaviour or spending habits.
Speak to your mortgage provider or mortgage consultant if you’re struggling
The rising cost of living, and increasing interest rates in particular, means that many households are now finding it hard to keep up with mortgage repayments.
But suffering in silence shouldn’t be an option, so speak to your mortgage provider or mortgage consultant, as they could offer help such as letting you underpay for a set time, or even putting you on a new and better deal. Keep in mind that your home may be repossessed if you don’t keep up your mortgage payments.
How we can help you
Here at Questa, our team of specialists can help you navigate the cost of living crisis, reviewing your finances and guiding and supporting you as together we devise your own plan of action. What’s more, we can help you protect your savings and show you how to make your savings work harder for you.
We’ve worked hard in the background to negotiate discounts with some investment funds, to achieve lower charges for our clients.
So if you have any questions about how to get on top of your finances, without sacrificing your quality of life and giving up your life goals, please get in touch and we’ll be happy to talk. Swift action could yield huge rewards, so don’t delay.