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Thisismoney: how to work out what you’d need to do to beat 7% inflation on your household spending

Journalist: Angelique Ruzicka, Freelance

ended 16. March 2022

For an article for Thisismoney, I'm looking at the average rate of inflation, the average household salary - £29,900 (April 2019 to March 2020) and what the average household spends (£588 a week) - all based on ONS figures. I'm then looking at what people need to save a month to combat 7% inflation (as per ONS stats - this may end up being higher of course but we're working on this rate for now). To make it more palatable for our audience we're then looking at what you'd need to cut back/make per week to beat inflation. This could be by cutting back spending on certain bills, making money elsewhere, etc. It would ask the question: Could you save £10 a week on four things to account for inflation? I’d explore how this could be achieved and am open to any practical suggestions.

5 responses from the Newspage community

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Fanny Snaith
Owner at Fanny Snaith - Certified Money Coach
"Saving £10/week or £44 per month is £528 per year. Assuming that you have gone through all your bills, direct debits and standing orders and know your account is clean and not carrying any waste, we then need to look at trimming and snipping along with generating extra cash. Canceling things is a sacrifice but if needs must, needs must. Spotify, Amazon Prime, Sky, Disney+ - are they need-to-haves or nice-to-haves? Equally, is your gym membership a need- or a nice-to-have? How much alcohol are you consuming - could that be reduced helping your health and your wealth? How can you generate cash? What skills can you offer for payment? Can you teach something to someone? Can you sell stuff? Can you make stuff and sell it? One of the keys to a question like this is how resourceful can you be? What questions do you need to ask of yourself to allow ideas to flow to you and where ideas flow, money often does too."
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Scott Gallacher
Director at Rowley Turton
"Firstly, I'd check you aren't paying for anything you aren't really using. A quick scan of my own expenditure and found I was paying for an online monthly gaming pass for a console I was no longer using and several TV streaming services I wasn't watching. Cancelling all of these will save me around £40 a month. Secondly, for those things that I do need or use (gas, electric, mortgage, insurance, etc.) you should check that you're on the best possible deal. Previously I was able to save my father-in-law over £500 a year by simply switching his home insurance to the best deal."
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
"Whether you can afford to save £10 per week is going to depend on your starting point. If you're already on the breadline then this is going to be difficult to do. If you have a bit more room for manoeuvre with your finances, a few options could include: making your own lunch or coffees, rather than buying them on the way to work; calling your TV provider e.g. Sky/Virgin and asking for a better deal; cancelling one of the many TV subscription services out there that we’re all guilty of paying for, e.g. Netflix, Amazon, Disney; cancelling your gym membership if you never go, or moving to a lower cost provider such as Pure Gym; and looking for special offers when you do your weekly shop rather than buying the usual."
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Marcus Wright
Managing Director at Bolton Business Finance
“The biggest bill for most households is their mortgage, so it’s probably a good place to start when it comes to saving money. There are two ways to lower your monthly mortgage payment, reduce the interest or extend the term. 1. Reduce Interest. This can be achieved by remortgaging to a new deal, usually with a new provider. Even a small reduction could save thousands of pounds per year, lowering the monthly payment. 2. Extend the term - Although this could cost you more in interest in the long run, it can reduce the monthly payment. The term could potentially be reduced again in the future. An FCA-registered mortgage broker would be able to help assess your options.”
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Legend
Maddy Alexander-Grout
CEO at My VIP Rewards
"Check that you are getting the best rates for energy in your local area, different providers charge different rates for each area across the country. Sites like Uswitch can help you to make sure you are with the right provider. "Health-permitting, turn your thermostat down by 1 degree, as right now this could save you up to £80 per year. "Make sure you regularly bleed your radiators: this makes them more efficient, as trapped air can stop the heat from circulating. Buy vouchers for your shopping from sites like My VIP Rewards, save on the voucher cost and it will help you to budget for your weekly shop. Have a no spend day once per week. Don’t buy anything at all. Make sure you check out the reduced to clear sections at the supermarket and plan your food in advance. Use Cashback apps, you can save on bigger purchases. Take out cash at the beginning of the week, and put anything you don’t spend in a jar. "Give every penny and every pound a purpose, this will help to eliminate any unnecessary spending. "Check your bank account and subscriptions. Cancel anything you don’t use. Or use free versions. "Renegotiate on your sky and broadband, it’s very easy to do but not a lot of people do it."