There is no doubt about it; the cost of living in the UK is constantly rising. Whether it is gas and electric bills going up by an unholy 25% a year, petrol prices soaring through the roof or supermarkets over inflating their prices, times are getting harder. While these companies sit back and argue their case for increased prices while posting record profits yearly the general population are having to dig deeper and be more financially aware than they have been in the last 30 years – an abrupt shock for some.
Salaries and Quality of Living
A study from the Mail (not the best source I know) has revealed that young adults have to earn twice the amount their parents did at their age in order to live a comparable lifestyle.
According to them the average young adult earns approximately £21,000 per year, but they would require double that if they wanted to get onto the property ladder. The average age of a first time buyer is now 35, showing a 7 year rise over the last decade. This is due to a massive rise in house prices way over inflation and a requirement for a much larger deposit from mortgage providers (in fact all loan providers are now much less lenient than in the past).
On average a household will need £1,000 worth of additional income next year to keep the same standard of living they have this year. Unfortunately incomes are not going up by anywhere near this amount, in fact the article explains the average pay rise is around £200. Leaving the majority of households £800 out of pocket.
Consumer Expectation and the Effect on the Economy
It is simple economics that if consumers have no faith in the market then things will not improve. As the old saying goes you need to spend money to make money, and this goes for entire populations not just individuals. Earlier this year Nation Multimedia published statistics showing that 62% of people believe their income to be insufficient to cover daily spend, 55% think the prices of goods will increase by the end of the year while only 8% see them reducing.
This means a large amount of consumers are putting a cap on their spending, with less money going around and more people saving for the next price increase the economy has to rely on less natural means to get back on its feet (such as government intervention).
What Can You Do?
Here are a couple of tips to help you get through this increase in living costs.
Spend less on food
It can be tempting to buy ready meals and takeaways but they can be a huge waste of money. I would recommend doing a weekly shop at a supermarket. This way you can plan meals, buy in bulk and get some great bargains. Also taking a packed lunch to work is a great way to not only cut down on expenditure but also stay healthy, even if it does make you feel like you are back at school.
Cut down on expensive recreational activities
If you are anything like a large portion of the UK you will probably go out and drink on the weekends, and failing that you will have some hobbies to keep you occupied and help you wind down from the previous weeks work. Are these activities costing you a small fortune? Figure out way to reduce your spend, maybe only allow yourself out on the town every other weekend, or only have those snowboarding lessons once a month.
Reduce your monthly bills
There are a lot of websites out there that help you to reduce your monthly bills. Changing energy providers can help, as can cutting down on your sky subscription or mobile phone contract. A lot of people spend up to £50+ on mobile phone contracts every month, next time you upgrade you will find some great deals on contracts for under £25.
While it can sometimes seem futile we all have to struggle through the hard times at least once in our lifetimes so remember to stay positive, work hard and work hard to increase your income every year.