Coping with the Cost of Living Crisis

Lynn Beattie is a Personal Finance Expert and Cost of Living Columnist for The Mirror. Lynn explains things we can all do right now to help save money on essential bills. Including, our new Debt Consolidation Calculator tool which could not only save you money, but help you be debt-free sooner.

How to Save Money on All of your Essential Bills

The Cost of Living Crisis continues to deepen in the UK. Inflation is closing in on 10% with our regular purchases being on average 10% more than this time last year and prices are continuing to rise.

Food, energy and fuel are the big areas that have hit the hardest. Finally, we saw a reaction from the government on 26th May, announcing support and grants for everyone in the UK, weighted more towards those on means tested benefits. The support is a positive step but isn’t enough to cover all the price/bill increases.

I wrote this article for Zopa bank earlier in 2022 giving many ideas on how to save money on the big areas of food, energy and fuel. I want to describe in this article how to save money on all the other essential bills and how to make a bit of money too. Now is a time when we need to go back to basics, creating a budget and getting the best deal on all the monthly bills, saving as much as we possibly can.

Review your Spending and Create a Budget

Before creating a budget, you need to understand your spending patterns. Keep a spending diary for a few weeks/a couple of months and track everything. Every tap of the card, every bill paid, every cash purchase. Record your spending every day in a notebook, on your phone or on a spreadsheet and add up what you spend into different categories, groceries, eating out, clothes, children’s spend etc.

You will then get a realistic view of what you have spent and can create a budget that you are far more likely to stick to. Maybe you spend £400 a month on groceries. Aim to cut this back to £300 in your budget, rather than an unrealistic/made up number of £200. Your new budget needs to be based on realistic reduced spending levels.

Saving money on your groceries is achievable in many ways. My top three suggestions are firstly to meal plan your food for all meals and write a list accordingly for your weekly shop. Try to stick to one grocery shop only, no little top up shops in between where you might spend the odd £10 on ‘little bits’.

Secondly whilst you shop, visit the reduced section first, whats on your list from this wonderful yellow sticker section or what can you substitute. Then head to the frozen aisle next, its so much cheaper and better for waste to get your meat and vegetables from the frozen section. The next section to visit is canned goods, also packed with lower cost food essentials.

Thirdly batch cooking is your friend, make big quantities of recipes that can be used in different ways and freeze them for later. A Bolognese sauce can be used in many different pasta dishes or even turn into chilli with a few beans added. Here is an article I wrote for The Sun packed with a week of money saving family food ideas and recipes.

Review all your payments once you have your spending diary detail and cancel those that you don’t need. Question all those direct debits that you pay and if you get value for money. Do you really need three TV packages, the beauty box subscription and the gym membership? Likely not.

Review your Debt Payments

Are you making monthly repayments to credit cards, overdrafts and loans? Are your interest rates the lowest that you could be paying? When I was paying off my £16k of credit card debt one of the very first steps I took was to consolidate my debt to reduce the amount of interest that I was paying.

A recent addition to the Zopa bank helpful resources is a new debt consolidation calculator in their app. This tool can be found in the borrowing power area. The debt consolidation calculator lets you see if you could save on your existing debt by consolidating it into a Zopa loan. Either enter your current borrowing details manually or use open banking to let the app see what you currently have outstanding. The calculator will then compare your existing debt to a loan from Zopa to see how much time and money/interest you could save by moving your debts into one place. Early results show customers save on average a huge £1700 over the life of their loan and were out of debt two years earlier than if they’d kept their previous debt where it was.

Get The Best Mortgage Deal

A mortgage is often the biggest monthly bill and an important one to ensure that the interest rate and deal you are on is the best you can get. If you’re on the standard variable rate, you should be able to save money. Call your mortgage company to see what fixed rate or variable rate deals are available. Now is a good time to fix your mortgage as interest rates are expected to continue to rise. You may also benefit from an independent review of your mortgage deal by speaking to independent broker such as Trussle who can arrange the transfer to another lender with a better deal.

How to save money on your home, car or other insurance.

Insurance policies are normally renewed every year and most people accept the auto-renewal quote for ease. I advise never to just accept the auto-renewal quote. Even one simple phone call to your insurance provider will likely result in a lower quote. Do an online comparison using a popular comparison site. My favourite is the Top Cashback comparison site where you get to compare policies and get the best deal PLUS get extra cash back as well when you switch.

Think about switching your car insurance to Pay as You Go with a company like By Miles. This is a brilliant money saving option for those who drive less than 8000 miles per year. This works by you paying a smaller upfront amount and then a cost per mile charge for every mile driven, all monitored by a black box that sits in your glove compartment for older cars, or connected directly to your cars mileometer via their app for newer vehicles.

How to save money on your home broadband

Home broadband is a bill where you get a deal for the first 12/18 months of the contract and then it reverts to a much higher monthly charge at renewal. Keep a diary note of your contract end date and switch 30 days before the end of your contract to a brand-new supplier to benefit from the new customer deal again.

Cash back deals with broadband switching are amazing, always worth taking advantage of at every renewal time. Sign up for the chosen broadband deal via a Cash back website and benefit from a cash back bonus that’s often £100+. You’re getting the same deal you would if you’d gone direct to the new provider but with the extra bonus of the cash back.

Use Cash back sites for all your online spending

Whenever you are buying products or services online, cash back will mostly always be available as an extra discount. As already mentioned, it’s available for insurance and broadband. Just search on the cash back site for your chosen retailer and see what cash back discounts are available. From flower delivery to clothes, recipe boxes to makeup, there is always a cash back extra discount available.

The big cash back sites (Top Cashback) have created a clever browser tool that sits on your computer and reminds you when cash back discounts are available when you are on a website just about to buy.

How to save money on your mobile or home phone deal

Do you really need a brand-new mobile phone every two years, can you make your existing phone last longer and switch to a SIM Only contract? The savings here are huge. Alternatively buy your phone handset only, perhaps a model that is a previous version and then pair up with a SIM only contract. You will always find great deals on the older models of a phone when a new version has just been released.

Get rid of clutter

Clutter can be turned into cash. Some of my favourite ways of making money are selling old tech, tablets, phones, books to Music Magpie or We buy Books. Branded clothes sell well on eBay or Vinted. Bigger furniture items and toys, collection only, sell well on local Facebook Groups. I had great fun at a car boot sale in my local market selling clutter and made £200!

Lynn Beattie is Mrs Mummypenny a Personal Finance Expert. Her website is www.mrsmummypenny.co.uk and follow her on Instagram @mrsmummypennyuk