The cost of living crisis has made it difficult to make ends meet for many people across the nation. However, having a plan to handle your finances during this particularly turbulent time could make all the difference.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
If your family is facing a tighter budget in light of increased prices on everything from food to fuel and other essential expenses, there are a few things you can do to help your financial situation.
Review Spending
It’s important to remember that decisions you are making now could affect you for years to come, so don’t be too short-sighted. One way to ensure your finances don’t spiral out of control is to thoroughly review your spending. By doing this you can see areas where you may be overspending and come up with ways to cut back. There are often things that you may not realise you are still paying for, such as subscriptions, that can easily be paused or cancelled until you have more disposable income. Identifying how much money is coming in and how much is going out each month will help you be more mindful of spending and will also help you stick to your monthly budget.
Prioritise saving
Having an emergency fund that can get you through a brief period of reduced or no income is a great lifeline to have. While this shouldn’t replace wealth protection plans for longer periods of lost income, having a savings pot to turn to can make all the difference. Create a dedicated savings account for this specific purpose and make it a goal to save enough for three to six months worth of expenses, or as much as you comfortably can afford. Add it into your monthly budget and prioritise saving a set amount each month through an automated payment rather than manually transferring random amounts after all other spending has happened for the month so it becomes part of your regular routine.
Resist temptation
When you know you have a large amount of money, like in your pension or investments, it can be tempting to dip into these pots during tough times, but you must resist! Your pension and investments are long-term financial activities and tapping into these could not only mean that this much-needed money won’t be there for you later when you most need it, but you will also likely be responsible for early withdrawal penalties.
Plan with a professional
Working with an independent financial adviser to build your cost of living crisis plan is a great way to ensure both short and long-term financial security. If you’re ready to get started or have questions about how to build your plan, get in contact with the experts at Dental & Medical Financial Services today.