Living costs could go up £1,800 before end of year: Here’s how to cut expenses now

Higher costs are likely to prove challenging for households ahead of Christmas. Here’s are 5 ways to cut expenses and save money before the end of the year.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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With labour shortages, rising energy costs and inflation about to hit its highest rate in a decade, it’s looking like this won’t be the merriest of Christmases for many. In fact, many families will begin to feel the pinch as the year comes to an end.

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Brits are facing a tight end of the year

Research by the Centre for Economics and Business Research (CEBR) shows families can expect their cost of living to increase up to £1,800 before the end of the year. This is the result of pandemic-related difficulties plus a series of financial issues that include soaring food costs, the highest pump prices in years and tax hikes.

Altogether, these factors signal a cold and expensive winter ahead, according to Greg Wilson, founder of Quotezone, who says families should focus on cutting costs and saving for the season, especially in the run-up to Christmas.

5 tips to cut costs and save

There are plenty of things you can start doing right now to help offset rising costs. In fact, to cut your monthly expenses, you should look into every aspect of your budget. Wilson explains: “Think about small extras you could cut on a daily basis that wouldn’t really affect your day – like a takeaway coffee every morning. One less a day could save you £280 by Christmas.”

Wilson suggests starting by comparing the costs of your suppliers, including gas, electricity, phone and Internet. Call around to see if you can get better deals with other companies or a better tariff with your current provider. You can also use comparison websites like Quotezone to find better prices for insurance policies.

On top of this, there are five other ways to cut your expenses and boost your funds this winter.

1. Sign up for any government schemes you qualify for

This includes benefits, job incentives, and Bounce Back Loan schemes for businesses. According to Wilson: “It’s also worth checking if you’re paying too much for Council Tax. Up to 400,000 homes are in the wrong council tax band – and they have a variety of flexible payment options.”

2. Reevaluate your expenses and see where you can downgrade

Maybe you’ll do fine with a smaller phone or Internet package. Or maybe you don’t need a gym membership at an expensive fitness centre when you only go once per week. Your gym might offer limited memberships that will suit you just fine.

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3. Look into transferring your credit card balance

Switch from a high-interest card to a new 0% APR credit card. Keep in mind that the 0% period will only last a few months, so be ready to pay off the balance before the higher interest rate kicks in. 

4. Sell, sell, sell!

Search your home for things you no longer use or need and sell them online through Facebook Marketplace or second-hand sites. Think beyond the obvious too. Bikes, sports equipment, old mobile phones, and vintage furniture can all sell for a decent amount of money. 

5. Get into the habit of saving

An emergency fund can help with unexpected bills that might come up because of price increases. Set up an automatic transfer to send money to a savings account every payday.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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