Economic forces are tangled in a complex web of interconnected financial impacts and outcomes. It can be hard to make sense of it, but one thing is clear. When buying power shrinks, workers feel it where it most hurts.
If you are feeling the pinch, pressured by rising prices and stagnant wages, it’s more important than ever to make the most of your earnings. Money-saving methods run the gamut, from tipping less at the pub to cutting back on holiday gift giving. In the end, the best ways to cut costs are the ones that actually work for you. And since each family faces a unique set of financial hurdles, your cost cutting success stories might not apply next door.
Spending Power Squeeze
In a contradictory set of economic trends, England is well-employed, with the strongest employment numbers seen in decades. Yet at the same time, stagnant wages are making it hard for workers to keep up with their financial obligations. A wide selection of short-term loans helps them cover costs between paydays, but UK workers need wage hikes to match rising inflation.
If you are looking for ways to stretch your income in the face of inflation and slow wage growth, start with these proven money-savers and then add your own frugal solutions:
Give Up Something You Spend Money On
Cost cutting can be painful, but it doesn’t have to be. When you’re faced with unsustainable spending, cutting back is the fastest way to find relief. Resolve and discipline will carry you to firmer financial footing, so tightening your belt may allow you to one day resume the types of spending to which you’re accustomed. Failing to right the ship, on the other hand, could lead to problems even more difficult to overcome. Cutting one area of spending leads to immediate results, and more importantly, sets you on a frugal course. Pare these discretionary buys to start saving:
Manicure and Pedicure – Salon costs can be cut for savings. Of course you’ll still need regular services, but visiting spas and salons less frequently can lead to substantial savings.
Café Coffee – Buying coffee every day adds up quickly. And if you’re prone to a midday refresher, your caffeine habit may be having more of a financial impact than you think. Do the math, and if you are still not convinced, keep spending too much on coffee. If you see the light, cut back or make your coffee at home.
Entertainment Subscriptions – Families need to be entertained. But too often, subscriptions overlap, leaving you paying twice for the same services. Without sacrificing your most-used entertainment resources, eliminate television, internet, and movie home delivery.
Prioritise and Plan for Prosperity
Fundamental aspects of healthy personal finances are sometimes overlooked. Setting spending priorities and staying within your limits are cornerstones of long-term financial stability, but they aren’t always treated that way. More commonly, consumers spend until cash on hand dries up, and then make further charges on credit cards. The unsustainable approach only leads to excessive debt, so clearly-defined priorities are needed, to keep spending focused on the things that matter most.
Without a long-range plan, your finances are left to fate, making it hard to squeeze the most from your monetary resources. A well-conceived plan not only protects your immediate financial interests, but it also sets the stage for financial security. Economic forces are bound to interfere, but starting with a plan gives you the tools needed to adjust when conditions change.
Pay a Fair Price for Credit
Lending markets frequently shift, changing what’s available to borrowers. The types and scope of available credit respond to consumer demand, so these shifts might also benefit your finances. You might be paying too much servicing your existing debt obligations. And opening new credit can add to the problem, if you lock-in to the wrong deals. For the best financial outcomes, weigh your options before making commitments, and use the most affordable forms of credit. Even if you have to pay to remortgage or consolidate your debt, the long-term savings can help stretch your spending power.
If your paycheck doesn’t stretch as far as it once did, you are not alone. Workers are starting to feel the pinch across the UK. Cost-conscious moves can help boost buying power, when you need it most. Take these and other steps to make the most of your shrinking buying power.