The cost of living crisis is crunching the finances of practically everyone in the UK, with inflation outpacing pay, and four in ten finding it difficult to pay their rent or mortgage.
The result is that people are cutting back nearly £25 billion worth of discretionary spending, and enjoying less luxuries as before.
Many of us are now budgeting, but it is possible to maintain a satisfying lifestyle on a budget. In this guide, we’ll show you five great secrets to crafting an enjoyable lifestyle while cutting back on spending.
Experiences over material goods
Memories last a lifetime, while material goods all too often end up living the rest of their lives in the back of the cupboard. As such, if you’re the type of person or family that typically spends their weekends frequenting the shops, consider going for walks, exploring spaces outdoors, or spending money on cheaper experiences via Groupon or Wowcher instead.
Mindful spending habits
It’s an obvious tip, but take extra care when spending, as opposed to whipping out your debit or credit card and spending without thinking. Consider how much use out of an item you will get, and whether you need it. Simply asking yourself these questions whenever buying an item will naturally reduce the number of items you buy overall.
Investing in health and wellness
Poor health and fitness can have an effect on our finances over our lives, with fitness especially being the key to improved mental health, mood, and therefore, productivity and career success. Consider putting your Friday takeaway money into a cheap gym membership instead. Just make sure you go – many people waste hundreds of pounds per year on gym memberships they barely use.
Building a robust emergency fund and reducing debt
When economic headwinds blow, it’s a good idea to build up an emergency fund of three to six months’ worth of household expenses, so you have a cushion if you lose your job. Before you do that though, if you have debts, either pay them off or if that is not possible, consider a debt consolidation loan that combines several debts into a single loan. This can be much easier to manage, compared to multiple loans with multiple interest rates, payment dates and so forth.
Finding a job with a high salary
‘Simply earn more’ might seem like a hollow statement when times are tough, but with job listings proving to be surprisingly resilient, consider applying for other roles to boost your pay further. While loyalty is a good thing to have in the world of work, if it’s only one way (from you to your employer), then consider upping sticks and joining a company that values your skills properly.