4 out of 5 adults (81%)* have changed their habits to pay for rises in the cost of living.
You may already be making changes to feel more in control of your money, but if not, here are some tips to help you get on top of your finances.
Find out where your money’s going
Start by finding out where your money’s being spent. It sounds obvious, but many of us don’t realise exactly how much we’re spending each month – and what we’re spending on – until it’s laid out in front of us.
Keep a spending diary for a month where you write down everything you spend, or track your spending using your phone. Many banks now have features on their mobile apps that you can use to track spending. Monitoring your money can help you build a picture of exactly where it’s going.
Go through your statements
Grab your last three bank statements and credit card bills and spend some time going through them, highlighting any areas where you think you’re spending money unnecessarily or spending too much. This could be on anything from a top of the range broadband package that you don’t need, to a mobile phone contract where you’re paying for data you don’t use.
Cancel old subscriptions
Brits waste £39 a month on average on unused subscriptions, according to NatWest bank**. The most common wasted money is on gym memberships, followed by phone contracts and video streaming plans like Netflix or Amazon Prime. Even magazine subscriptions of a few pounds a month are money down the drain if you don’t have time to read the magazine! Take a few minutes and cancel any subscriptions you don’t really use to save yourself a bit of cash.
Save money on your bills
Switching your energy supplier used to be a good way of saving money on your household bills, but with energy prices soaring, you may be better off staying on the standard tariff with your existing supplier once your fixed rate tariff comes to an end. That way you’re protected by the energy price guarantee. Our article How to save money on your energy bills has more information on what you can do to keep your energy costs down.
You may also be able to save money on your water bills by having a meter if you don’t already have one. It will depend on the size of your home and how much water you use. You can check whether you’d save money by going on the Consumer Council for Water’s website and trying its water calculator.
Break any bad habits
Take a look at your spending and see if there are areas where you’ve fallen into bad money habits, such as buying a coffee or lunch every day. Cutting that takeaway coffee to once or twice a week, or preparing more of your meals at home, will add up to meaningful savings over a year.
Draw up a budget
Drawing up a weekly or monthly budget will help you get your finances under control. There are plenty of templates online to get you started, like the MoneyHelper budget planner.
Alternatively, you can also use budgeting apps to plan what you want to spend and keep track of it. There are plenty available, including Money Dashboard and Moneyhub.
See if you can pay less interest
If you owe money on an expensive credit card, it may be worth considering whether you can transfer the balance to a credit card charging 0% interest. Although these cards are interest free, you will normally be charged a balance transfer fee of up to 3% of the amount you transfer. Because you won’t be charged interest on your balance, more of your money can go to repaying what you owe.
These cards aren’t right for everyone, and it’s important to make sure you can pay off your balance by the time the 0% interest deal runs out. It may also affect your credit score, especially if you do it multiple times.
Get help with unmanageable debts
If you are struggling to pay for the essentials, you are using one credit card to pay off another, or your debts are causing you worry, then contact a debt advice charity, such as StepChange. They will be able to give you help with your debts, free of charge. They may also be able to tell you whether you are able to claim any state benefits.
Check your credit report
Your credit report is a snapshot of the information that’s on your credit file. And this information is used by companies you already have a credit agreement with, and lenders you apply to, to make decisions about how good a risk you are. You have the right – by law – to see a copy of your credit report free of charge. It’s worth doing so you can see the information that lenders you apply to can access. Importantly, if there are any mistakes you can get them corrected.
There are several different credit reference agencies, but the main ones are Equifax, Experian and TransUnion.
More on why your credit rating is important.
Check if you're entitled to state benefits
Billions of pounds of state benefits go unclaimed each year, and you could be missing out. The national charity Turn2us has a free and confidential benefits calculator on its website which can help you work out which means-tested benefits you’re entitled to. It also has a grant search tool and information on grants you may able to apply for.
* Royal London research – The Cost Of Living, September 2022
** Brits waste £39 a month on average – Natwest Bank
More on your finances
How to save money on your energy bills
Energy bills can be a major expense, but there are some simple steps we can all take to try and keep costs down.
Understanding pension tax relief
Pension tax relief can seem like an alien concept, but it pays to make the most of it.
How to cut your bills
It’s always a good idea to regularly review your household bills to make sure you’re not paying over the odds. But it’s particularly important when the cost of living is rising. It will take a bit of your time, but you may be able to save some money by doing this.
Top 10: tips to manage your money
Monitoring where our money’s going can have a big impact on our attitude to spending and how much we save. Read our tips to help get you started.
Budgeting is a great way to stay on top of your finances. Find out how to draw up a budget, increase your income and cut your spending in our money guide.