Money saving tips

Why is the cost of living rising?

Covid and other world events caused problems with the supply chains for things like food and fuel, so the prices have risen very quickly.

With inflation currently running at around 10%, price rises are still coming thick and fast. Coping with them is a struggle, but there are some simple things everyone can do to help ease the financial pressure.

Know your budget

Working out and regularly reviewing a budget is the best place to start. That may sound like a chore but it’s an easy thing to do.

Metro Bank accounts come with tools to help you track your spending, like the 5-star rated* App. The Insights feature helps you identify your spending patterns so you can see how you’re using your money. Once you’ve worked out what you spend on essentials, you know how much spare cash you have to spend or save.

Where can you save?

Make a list of your outgoings and sort it into a priority or essentials, such as rent or mortgage, food, heating and lighting. Anything that’s not an essential may offer scope to save money.

But tread carefully. Cutting back on entertainment or treats may seem an obvious way to save cash, but everyone needs at least a little joy in their life, so it’s important to keep some money aside for that, if possible.

Cancelling all your Direct Debits and standing orders will certainly reduce your monthly outgoings, but may be unwise if you’re getting a discount or better rate because of the way you pay. Look at them carefully to see what things you can actually do without and consider any charges for cancelling.

An expensive gym membership, for instance, could well be replaced by free outdoor runs or cycling to keep you fit. An expensive phone contract may seem another easy cutback, but most people need a phone, so it might be better to switch to a cheaper deal.

Cutting back on insurance may also seem attractive but could actually be a costly mistake, especially if you end up in a situation where you need to make a claim.

The key to successful budgeting is ensuring you have enough money to cover all your costs, including a little for your social life and ensuring you retain financial peace of mind.

It’s well worth looking out for free apps that can help you with budgeting and you can set up alerts on your phone when payments are made.

Small changes add up

But there are also plenty of little lifestyle changes you could introduce to help keep a handle on your expenses. Think about your spending habits and consider whether anything you’re planning to buy is really needed. I think about it as a choice: buying something now means you won’t have money to buy something else later.

Petrol costs have rocketed, so try car-pooling with friends and take it in turns to drive, take advantage of fuel loyalty cards, and keep your car well maintained so it’s fuel efficient.

I’m sure you have your own ideas about money-saving but there are loads of good websites offering excellent tips, whether it’s switching to cheaper items – phone, food – or finding free or cut-price ways to have fun. Take a look at Metro Bank’s tips on dealing with the rising cost of living, including links to organisations that offer support for debt and money worries.

My advice is to spend a little time on this and you could soon see the pennies mounting up again, rather than your savings shrinking as you dip into them to keep afloat.