Ways To Save Money Amid The Rising Cost Of Living

The current inflation rate in the UK was recorded at 4% in the month of September, which is low by 0.3% in relation to the rate recorded in August and 2.5% recorded in May last year, the highest-ever inflation rate recorded since 1991.

Although inflation rates have significantly dropped, people are still struggling to get by, thanks to the pile of debt they have to tackle now that they took out in order to keep the wolf from the door when the prices were hitting through the roof. Food, transport, energy and housing are all going up.

The cost of living never affects everyone in the same way. You may find some people getting along very well despite heavy debts while others are having difficulty holding up.

Tips for saving money on food and housing

Here are some of the personalised tips to help you cut back on the cost of living and stash away money for the unexpected.

Save on food

It may come as a little surprise to you, but it is the fact that food costs you a lot of money because of your poor consumption behaviour. You stock up on things to save money despite the fact that things will go off before you use them up. Affinity for some brands is also one of the reasons you pay more than usual. A lack of rational decision-making also leads to some bad choices. Below are some tips you should follow to keep food bills as low as possible:

• Avoid wasting food by eating everything edible and make sure everything is cooked to a turn. You can save up to €200 every year by avoiding food waste.
• Do not let your consumption adhere to the best-before date. It is not the use-by date. Do not eat food if it is past the use-by date, but use common sense when it is past the best-before date. Check for mould, smell and the like. The invisibility of these telltale signs clearly indicates that the food is edible. Spices can survive despite being past the best-before date. Freeze them so they do not lose their natural aroma and taste until they are past the use-by date.
• Set your refrigerator’s temperature at less than 5° to keep fruits and vegetables fresh for three days. Bananas, pineapples and onions should be kept at room temperature.
• Buy in bulk only those items you know you can finish in time. Local supermarkets offer schemes. Use them when you are saving money. Calculate the cost per unit and then decide if it is worthwhile. Avoid signing up for membership programmes. They do not help you save money at all.

Save on housing

Interest rates for mortgages are on the rise. Though the housing market is no longer as brutal as it was when the inflation was record-breaking high, many people are still struggling to qualify for a lower mortgage rate. An ideal size of a deposit does not have to be more than 10% of the total price of your house, and yet people getting their foot onto the property ladder are struggling to qualify for lower interest rates. Here are the tips to help you if you are worried about your mortgage payments going up:

• If you are not going to refinance your mortgage in the next six months, you can choose to overpay. Lenders accept up to 10% overpayments annually. However, when you overpay your mortgage, look out for your rainy-day fund.
• Switch to interest-only mortgage payments if you are in a tight spot. Use it as a short-term solution. Otherwise, it can be complicated to repay your mortgage balance till the end of loan term.
• Downsize your property. The released equity can be utilised to pay off your mortgage balance.
• Extend the repayment term if you have your back against the wall. You should be able to cut it back as your financial situation improves. Choosing a long-term repayment period will make you pay a lot more money as interest payments.

Tips for saving money for planned and unforeseen expenses

There are a number of savings challenges, and each one of you faces a different one. Some people feel they should save money, but they fail to do so, while others save for planned expenses but at a slow pace. Some are so badly off that they cannot set aside money for an emergency. The following tips might come in handy if you are determined to grow your savings:

• Start with coins and notes

Everybody has some coins in their purse. You let them be idle in your cupboard. Have a savings jar and put all of your coins into it. When you go to the bank, deposit them. If you have very young children, they can help you collect coins strewn here and there in drawers, purses, etc.

Likewise, you should pop notes into your savings jar. Once you have saved a considerable amount, deposit it into your savings account. At the end of the month, what you are left with should also be transferred to your savings account. You will not realise that the money you have saved is enough to meet emergency expenses. This is how you can avoid relying on doorstep loans in Ireland every time you come across some unexpected expenses.

If you find all this troublesome, you should switch to a cashless mode. For instance, use your debit card or payment apps to make all purchases. One of the benefits of using a digital mode is that you will know how much you have already spent. It stops overspending. Transfer what you are left with from your pay account to your savings account, and make sure you do not dip into those funds for any reasons other than an emergency.

• Round it up and round it down

Several bank accounts are out there offering the facility to round up the payment to the nearest Euro you make through your debit card and put the small extra amount in your savings account. Check your bank account balance, and if it is, for example, €140.52, you should round it down and transfer the 45p to your savings account. If you want to be a bit rigorous with your savings, you can skim it to the nearest €5 or €10. The amount will quickly add up, and you will see your savings account has significantly grown.

• Learn to say no

You should learn to say no if your money disappears on unplanned expenses like shopping for clothes, shoes and the like.  Impulsive purchases are bad for the health of your finances. You will find yourself in the red, and eventually, you will take out same day loans in Ireland.

• Pay yourself first

If you are looking to save money for big expenses such as a house and a car, you should pay yourself first. As soon as you receive your salary, you should immediately transfer a fixed portion of it, say 10% or 20% of it, to your savings account. You will have to analyse your monthly expenses to decide the saving limit. It can go up and down based on your financial circumstances.

The final statement

Savings are paramount to meet planned and unexpected expenses. Figure out ways to whittle down the cost of food, transport, housing and energy and save that money. Pay off your debts on time, use a high-interest-yielding account and prioritise savings.