Home Business NewsBusiness Cost of living crisis: How to deal with ‘awful April’

Cost of living crisis: How to deal with ‘awful April’

by LLB Reporter
27th Mar 23 11:27 am

Whilst the Energy Price Guarantee has been confirmed to continue at its current rate from April 1st, providing support for consumers on their energy bills, a flurry of further price increases from the start of next month is set to see the cost of living in the UK worsened.

Millions of consumers are set for an increase in their broadband and mobile contracts from April 1st, with many customers expecting to see their bills rise by as much as 17.3%, in line with January’s Retail Price Index – standing at 13.4% – as well as a 3.9% top-up telecoms companies are allowed to raise prices by mid-contract. On top of this, water bills are set to rise across the board, with the average annual price set to stand at £448, although government assistance is being increased in order to provide help to 1.2 million households.

In light of what is being recognised as ‘Awful April’, HyperJar – the UK’s most-awarded financial budgeting app – has provided tips to help Brits best organise their personal finances ahead to reshape their money habits in a cost-of-living crisis.

Try the 70/20/10 rule:
Traditionally known as the 50/30/10 rule, the cost-of-living crisis has households to tighten their purse strings, resulting a new budgeting method: 70/20/10. Use 70% of your take-home pay on essential expenses such as rent, bills and groceries. However, in order to make it holiday savings friendly try cutting non-essential spending from 20% to 10%. Store the additional 10% in a travel fund, and the remaining 10% in your normal savings account for emergencies.

The average monthly pay for a UK full time worker is £2773 a month, according to the Office of National Statistics (ONS). This means that if you put away 10% of your pay for the next three months, you could save £831 by the beginning of summer.

Visualise your spending, so you can track it properly:
It’s important to track you spending whenever you’re saving money. If you can look at your bank transactions and find unnecessary purchases, you’ll be able to see what you need to cut out. For instance with HyperJar, you can even visually track your finances which makes them easier to understand and digest. You’ll be surprised to see how far your money can go if you cut out unnecessary and impulsive spending.

Name your goal:
Having a desired target in mind is useful as it will motivate you more to cut costs and save towards your goal. A study by National Savings and Investments (NS&I) previously found that people who set their savings goal save faster and up to £550 a year more than those who don’t.

Mat Megens, founder of HyperJar, explains the psychology of reorganising personal finance:

“Psychologists know this trick works – achieving goals you’ve named and visualised is way easier than trying to do something without a clear picture in your head of what you want and how much it’s going to cost.

“It’s about making sure we’re doing all we can to make our money go as far as possible. There’s no magic wand, but we can all drill down into our budgets to understand where our money is going, to save and cut costs where we can.

“Even if you can’t save much at all, being more conscientious with your spending will help you psychologically. An understanding of what you have and where it needs to go will help make navigating this period less stressful.

“Nowadays, when paying is so frictionless, it’s easy to overspend because there’s less of a concrete connection with money. Controlling the controllable is something everyone can do to get on the front foot.”

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