Only you can get out of the cost of living crisis
The UK and the wider world has been a wash with reports of inflation going up by huge amounts. High taxes are hitting those that are working and it seems that everyone is feeling the pinch from all angles.
The ongoing war in Ukraine is also having a wider global impact as food prices and energy prices soar.
However, with all this negative talk I do believe there is opportunity. There is an opportunity to look at what you’re doing, where your money is going, hammer down on those unnecessary expenses and work your way to a better life.
Take Inventory
Ok so this won’t be a full on guide on how to do it, but more some pointers that will hopefully help improve your finances. I will start off and say I’m no financial adviser just someone who has done these things.
Start off by taking inventory, that means list all of your income and your outgoings. By outgoings I mean every penny. No more rounding up or down, full pounds and pennies.
List everything you’ve signed up for, the cheeky Amazon Prime account? The 1,000 V-Buck subscription for your son, all of it get a full list together.
List your debts as well, total them all up the pounds and pennies, are you scared yet?
Strike them off
What do you really need? Seriously, what do you really need in life, if we took everything away our essentials would look like this:
- Mortgage/Rent
- Electricity
- Gas/Heating
- Water
- Food
Believe it or not you will survive without Netflix. The world won’t end if you get rid of Spotify and as long as you’re not in debt, then you won’t need money putting aside for that.
Total up the essentials on a monthly basis. Minus figure from the total amount of expenditure you have and bang — yes that is the amount of money you’re bleeding out. Every. Single. Month.
Here in the UK we pay Council Tax and unfortunately that does need to be paid so pop that in there. If you have a TV and watch live TV, you’re going to need a license, pop that in there as well — of course you could avoid this by catching up on demand.
Wait, wheres the telephone or clothes?
Believe it or not you don’t need one, it isn’t an essential part of your life. I can already hear the protests “Jesus Rob you’re throwing me back to the dark ages, how can I live without TikTok”.
Well maybe I am, we survived thousands of years without the telephone and if you’re at the point where money is so damn tight you’re not going to be needing one of those until you’re more stable.
As for clothes, I get it you’re going to need them. Waist lines grow. Trousers get holes in some really awful places. Both are true, but you don’t need to go out buy Michael Korrs latest jeans.
You also don’t need to be paying £54 a month for an iPhone 21+. I have an iPhone 8, I pay £11 a month and that does for me.
Essentially its time to strike out any expenses that you don’t need.
Get to work
So with the Netflix subscription cancelled, the kids cable bill reduced to £0 and your wife about to walk out the door, hopefully not, you’re now in a position to throw in the next thing.
Get to work. If your full time job isn’t paying you what you need to cover your expenses during this cost of living crisis then its time to ramp up the 7pm — 2am club.
That means working after the day job, putting in the extra hours on your side hustle. Whether its selling old junk on eBay, making jewellery or putting ads on a website — whatever your side hustle get it working, get it bringing in a few extra pounds.
I know what you’re thinking what difference will be £10pcm make. Well make it and find out. That £10 is £10 that isn’t coming off your salary, its the renewed Netflix subscription or whatever its also £120pa extra in your pocket.
Put in the work, explain to your spouse or partner that you love them but you’re going to need to put some extra time into this so I can continue to pay for our expenses — do the work, results may vary.
Walk
Back in the 50s there weren’t half as many cars on the road as there is today. Who remembers the cost of a litre of petrol being 0.58p per litre?
Look you don’t need to rev up the Audi to go to your local off license, you certainly don’t need an Uber. Those two things attached to your waist, will easily get you to the off-license 2–5km away.
Yes its going to hurt carrying home a big bag of shopping, and yes you’re going to get wet and yes you’re going to hate it. But no you won’t die. You will however save a tidy packet on your fuel bill and will help reduce your waist line.
“But Rob I live in a rural area?” Good for you, message here is ensure you have enough food for the whole week including snacks for the week. Discipline yourself to leave the car at home and to stay out of shops as much as you can.
This is when you really do get to spend £5 on Jellies and don’t feel guilty.
This isn’t limited to just your off-license trips for a bottle of wine on a Friday evening, this can apply for the trips to kids football game, a trip into town for a family day out — leave your car at home as much as much as you can and take a walk.
If you’re still driving to work, ha who remembers those days, talk to the boss about working from home.
I’ve got a credit card
Great. But credit cards need paying back.
Hunker down on your credit card bill, get it paid off, reduce your credit and put it out of sight for “emergencies”.
By emergencies I’m not saying the 45" UHD plasma display with the Dolby Digital surround sound television is an essential emergency purchase. I’m talking you’ve ran out of food, the penny jar is empty and you’re down to bread and water — plus the wife is about to leave with the kids after she found you opening a tin of bully beef for the 5th day in a row.
Look, credit isn’t a good thing, it doesn’t teach you financial management it teaches you how easy it is to get what you want and not what you need.
Hunker down on that credit card bill and only pay for what you need in emergencies.
Conclusion
Yes there is a cost of living crisis and no it isn’t nice.
The worse thing anyone can do is sit there and worry. Worry will achieve nothing other than waste your time and send you into a response of fear and eventually paralysis.
Get to work on reducing your expenses, increase the work you’re doing on your side hustle so it pays you something each month, reduce the petrol consumption, hunker down on your credit usage and don’t forget to tell the wife or husband you love them, regularly.
This article is not designed to be financial advise, but more a guide for some of the bits and pieces I’ve tried over the past 12 months.
