This is a collaborative post.
Do you feel as though you haven’t got a lot to show for all the work you do? Is there barely enough for a few small treats after you’ve paid all the bills every month? The cost of living is steadily rising, but for many people pay rates are stagnating. More and more of the money you earn is being swallowed up by living expenses, as prices rise but incomes don’t, and this pattern is becoming an ever-increasing problem.
There’s no sign of any change on the horizon either, so if you’re caught in the trap of having an income that’s failing to keep up with inflation, what can you do to reduce the effects? There are two approaches, which you can tryindependently or in combination:
- Reducing outgoings
- Increasing income
Reducing your outgoings
- Have a look at your expenditure and look for any costs that could be reduced or dispensed with. For example, do you have a country club membership that you never use? If so, cancel it. How much are you spending on your weekly shopping? Could you reduce that amount without affecting the quality of the products you buy?
- Check your direct debits and make sure they’re all still current. It’s surprising how easy it is to forget what you’ve set up in the past and discover you’re still paying out every month for things you don’t want or need anymore.
- Do the same with your credit cards and any accounts such as PayPal, which allow you to set up regular payments. Many payments automatically renew, so check that the ones you have in place are all current and important.
- Have a look at your regular payments to see if it would be worth switching providers. For example, how much does your cell phone contract cost each month? You might be better with a different company who offer lower rates, but check that they also provide excellent customer service and that there are no hidden extras.
- Check what interest rates you’re paying on any form of debt, from mortgages to loans to credit cards. Find out if there are any better alternativesand switch your debts around to take advantage of better rates and terms.
Some of these ideas involve dealing with credit providers, which will necessitate them obtaining a credit report on you. An important aspect of financial management is to be aware of what information credit reporting agenciesare using, so you can ensure it’s accurate.
Mistakes do sometimes get made, and if there’s a negative impact on your credit score, it could harm your chances of getting certain credit facilities or result in you paying more than you need to. You can ask to see your credit report and check its accuracy, and if you spot any errors do get them corrected. You’ll find websites with invaluable help on topics such as how to conduct a dispute with Experian so you know your credit report is as it should be.
Increasing your income
- The most obvious way of increasing your income is to get a new job, but that’s a big step to take. You don’t want to go somewhere where you don’t enjoy your work as much, just because it pays a few dollars more; but it’s worth having a look to see if there are any suitable opportunities if you wouldn’t be averse to moving.
- Starting your own full-time business is clearly going to require considerable expenditure before you see any return, but you can set up a small-scale side hustle with minimal expense and often very little bother. Then you can carry on working, making extra money in your spare time.
- Do you have any assets that might be worth selling? It could be a modest gain from a spare room clear out, or a major boost to your finances from selling the classic car you have stored in the garage. You don’t need to go crazy, just pick out items you could live without – when your finances are looking healthier, you can always go shopping again!
You may be saving only small amounts here and there, but in total it could amount to a fair chunk of change. It could be enough to pay for a vacation this summer, or do some redecorating; maybe buy new clothes. By combining all the various money-saving ideas with finding new ways to earn extra income, you should find your quality of life improves enormously,because you’ll be able to meet your obligations and still have some spare cash for the pleasures in life.