Over a third of Brits claim they would be unable to afford an unexpected financial expense, like a sudden medical bill, if it arose. This huge section of the population, 36.6%, has risen by 10% since 2007, just before the financial crisis began.
This research into household finances, conducted by the Office of National Statistics, shows a large proportion of people are struggling to make ends meet. In this climate, payday loan companies have grown to provide an invaluable service for many households, providing an answer when people are unable to stretch their wage any further with a fast cash solution.
From the perspective of a healthy economy, no working household should be struggling to afford the basic living costs – rent, bills, food and transport. But, in the current UK economy this is definitely not the case.
World Bank economist Andrew Burns told the BBC that the Eurozone is going to see negative growth in 2013 and the U.S market is expected to slow down further. This is going to bring with it further difficulties for British families who are already struggling with inflation which is driving the cost of living up.
The Bank of England’s inflation target of 2% hasn’t been met since November 2009. Since then it’s continued to rise and according to experts, is expected to peak in the third quarter of 2013. But, there’s some good news. Inflation is expected to fall below the target in the third quarter of 2014, bringing the cost of living down with it.
But until then, how can people get their money to stretch further than it already does?
It sound mundane, but the most important factor in managing your money is to budget. A lot of us assume we know where our money is going, but if you take a look at your statements from the past two to three months, you’ll surely find leaks. Everyone has spending habits which can be cut out and can end up saving you a lot of money. This extra money will go a long way towards paying your necessary financial expenses or freeing up money or emergencies. Write out a list of your income and your expenses, highlighting exactly what you need to pay and what is an ‘extra’. Set aside exactly how much you’ll need for household expenses and then quarter the remainder to see exactly how much you have to spend weekly. From whatever you have left, you should always try to save some.
In today’s society we often live by the rule that if something’s broken, get a new one. But not only is that a waste, it’s also a huge expense. While repairmen aren’t cheap, it will often still save you money to have an appliance fixed rather than buying a completely new model. In the back of an appliance brochure, there’s usually a list of parts and a number to call if you want to order one. It’ll be a lot cheaper for you to buy the part yourself and if you can’t, find a friend to install it.
In December, five of the six big UK energy companies raised their already high rates. While a lot of people think there’s nothing they can do about this, there are ways you can reduce your power bill and help the environment at the same time. It may sound old-fashioned, but simply turning off the lights when you’re not in the room and power points when you’re not using the appliance is an extremely easy way to save you money. This habit is simple to fall into and you’ll see the rewards when your next electricity bill arrives.