The cost-of-living crisis has undoubtedly affected us all, but the good news is that there are ways you can make your financial situation more manageable.
If the financial strain of the past few years has left you feeling less than optimistic about 2023, it’s important to know that you’re not alone. A study done by the Mental Health Foundation in November 2022 found that 10% of UK adults felt hopeless about their financial circumstances, with 34% feeling anxious and 29% feeling stressed across the previous month alone.
So, with more of us feeling the pinch than ever before, we’ve put together five actionable ways to manage your stress as we kick off another year.
Break it down
It can be all too tempting to bury our heads in the sand when faced with overwhelming or seemingly unmanageable tasks and our finances are no exception. But the truth is that knowledge is power and having a full picture of your finances can be all it takes to motivate you to take action.
Reviewing your finances doesn’t need to be complex. Simplify things by starting with the money that’s coming in and going out. Depending on your situation, this could be per person, or per household. From here you’re better able to see if anything can be done to change things up.
Whether it’s written on a notepad or filled in on a spreadsheet, once you have a clearer idea of the overall picture, you’ll more easily be able to identify any area you can work on. You can of course delve deeper into your finances by looking at any loan or credit card debts you may have and how you can pay these off quicker. However, just having a clear overview of what you have coming in and what’s left after your outgoings can be a simple, but very useful, place to start.
Control what you can control
The impact of the cost-of-living crisis will be felt for much of 2023, but there are plenty of things that are well within our control that can vastly improve how we manage our financial stress in the year ahead.
With a clear picture of your finances, you can then go ahead and identify any areas which could be improved. You may find that you can’t change many of your essential bills, but even the smallest outgoings can quickly add up. Being subscribed to just the basic versions of Netflix, Spotify Premium, Disney Plus and Amazon Prime mean you’re paying approximately £33.96 a month – that's a whopping £407.52 a year! Cancelling just a couple, or even all these non-essential subscriptions could help you get by easier from month to month, and you can get them back anytime you like!
Another way to save a considerable amount each week is by focusing on your food shop. There are loads of ways to help drive down the cost of the weekly shop, many of which you’ve probably heard of before. Trying things like the following can help you to make small savings here and there that quickly add up to a substantial amount:
- Making swaps to supermarket own brands
- Creating a meal plan before you head out to avoid impulse buying
- Using coupons found online or in the newspaper to bag a bargain
- Using cheaper supermarkets for your bigger shops
There are plenty of free tools out there to help you save on the food shop too, with many supermarkets offering apps designed to help you save as you shop.
Supplement your income
Times are hard across the board right now, so if you’re in a position to bring in some extra income the difference it can make across the month can be huge. Of course, not everyone will be able to earn extra money, but supplementing your income doesn’t necessarily mean additional employment.
There are loads of ways you can earn extra money online, whether it’s by starting a side hustle, selling unwanted items or completing surveys! Whatever your situation, there’s likely to be an option that fits around your other responsibilities and can help take the pressure off everyday living.
Or, if taking on new responsibilities simply isn’t feasible right now, you could try speaking to your employer about overtime or even negotiate a salary increase (just make sure that the timing is appropriate).
Talk to your lenders
It can feel intimidating to turn to lenders during times of financial difficulty, but more often than not they want to support you and will almost always be open to discussing short-term solutions. Although you’ll still be required to make your repayments, usually there will be room for negotiation when it comes to the terms. From extending the length of a loan to lowering the interest amount, there’s usually always a way forward that can help make your finances more manageable.
If you’re unsure where to start, there are charities such as StepChange that can help by liaising with lenders on your behalf. It’s worth bearing in mind that if you decide to enter into a reduced repayment plan, your credit score is likely to be affected.
Take time for you
It can be all too easy to let financial stress consume all areas of your life but spending time focussing on everyday tasks that you can easier control can be a great way to leave you feeling more empowered. Whether it’s household chores, cooking or organising, remaining on top of these areas can help lighten the load so you’re dealing with less overall.
It’s also important to look after your own physical and mental wellbeing, particularly when dealing with financial stress. There are so many ways to practice self-care, so, it’s just a case of finding something that works for you and dedicating time each day or week to do it consistently. There is also a range of charities that offer free confidential support for those who are struggling with their mental health, including Mind and Samaritans. You can contact either of these services at any time.
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