The Cost of Living ‘Crisis’
In a recent article from CNBC in December 2022, 64% of Americans were living paycheck to paycheck up from 61% a year earlier.
In the UK, based on the latest survey period of the 19th of April to the 1st of May 2023 from the Office of National Statistics (ONS) 93% of adults in Great Britain reported an increase in their cost of living in April 2023. Rising energy prices have been indicated as fueling this surge, in addition to food prices rising by 19.2 %, a 45-year high in March 2023 compared to the year before.
To take action, the UK government has been offering one-off payments to struggling households in a bid to help with the crisis.
In the EU, a recent article published in April in the Financial Times, it stated that food costs rose by 19.5 % in the year to March, the highest rate since Eurostat started collecting such data in 1997. European governments have intervened by capping the price on certain essential items and slashing taxes on food.
Apart from food, the cost of energy to heat homes and electricity also rose in the double digits as Russia largely cut off supplies to Europe.
This trend is also reflected in Thailand’s economic woes. The cost of living is expected to remain high due largely to the increased costs of energy and food prices.
What does the cost of living crisis mean for yo u and your money?
With this crisis you will no longer be able to have the same purchasing power as you previously did. Your income will quickly get sucked-up by the price increases, giving you less than you did for the same amount of money as a few years ago.
WHAT YOU CAN DO TO MINIMISE ‘SQUEEZE’ ON YOUR MONEY?
Firstly, you should assess your budget and current financial situation to see where you can make adjustments.
Determine if your income is enough to cover your basic needs (shelter, food, and transportation)
Go through your last month’s bank and credit card statements to validate your true needs vs wants.
Check for any unused or underutilized subscriptions that you are paying for on auto pay that could be re-negotiated or eliminated.
Create a budget and if your income is more than your spending on fixed expenses, consider looking for ways to increase your income by getting a new skill or changing jobs/companies.
If you have a surplus after you’ve paid all your expenses, consider building or increasing an emergency fund and investing your money.
If you need support reviewing your finances, or you are finding that rising costs are simply making things unaffordable – Book a FREE 20 minute Budget Review Session with us HERE
