Fighting the Cost of Living
Our household is currently trying to reduce our monthly overheads in response to the ever increasing cost of living. April is not that far away and a great many service providers will increase their rates and tariff as the new financial year begins. Then there is the ongoing effects, both direct and indirect, of inflation to consider. Although the UK inflation rate is dropping, currently sitting at 3.4% in December 2025, food inflation remains higher at 4.5%. Being based in the UK, salaries and billed services tend to be administered monthly. You get paid usually at the end of the months and bills can turn up at any point, depending upon when you started a service. Any payments coming from central government, such as state pension or other benefits, are paid every 4 weeks. This means that there are 13 payments in a year. I thought it pertinent to clarify this point as other countries, such as the USA, favour a fortnightly financial cycle. Hence as a household we work around a monthly budget.
Broadly speaking, our monthly outgoings breakdown as follows. I would assume that this is fairly universal. Council tax which funds the local authority and the services they provide. Then there are utilities such as gas, electric, water, mobile phone and internet. Most people have travel expenditure or the cost of running a car. Then there are groceries. Perhaps the biggest monthly expenditure for most people these days is paying for housing. Be it a mortgage or rent. Some of these things have very little scope to be reduced as customers have very little agency in the markets that govern them. Hence mortgages, rent and local taxation tend to increase steadily and can only be addressed by an increase in income or by moving. Travel, car and utility costs do have scope to be reduced. There are alternative vendors and a culture of changing service providers and securing the best deal. However, that only works if the vendors operate in your area.
At the end of last summer, we signed up to a fixed cost tariff from our energy provider. This is the second year that we have done this and it has proven financially prudent. It was unusually hot in the UK throughout June, July and August in 2025, hence we used a lot more power than usual trying to keep the temperature in the house equitable. The tariff meant that we weren’t hit by excessive costs for our three months of increased power usage. Other providers increased their base costs to capitalise on the heatwave. We have also given thought to having solar panels installed on the roof. We’re fortunately based in a warmer part of the UK and there are several schemes available at present that have favourable terms. However, our heating systems is still gas based and therefore wouldn’t benefit from such an undertaking. We could replace the heating system but that is sizeable capital investment. However, there are grants to help make such transitions.
Perhaps the areas with the greatest scope for financial savings are from services such as internet provisions, mobile phone tariffs and streaming platforms. We’re shortly moving to a new ISP and maintaining an identical service for half of our current cost. Both Mrs P and I have moved to SIM only phone contracts, electing to get off the expensive, yet pointless upgrade treadmill. We have also cancelled or replaced some streaming services. I am also trying to eliminate the costs associated with certain software services like Office 365. All of these sorts of saving can initially appear quite small and possibly inconsequential. However, once you add them to a spreadsheet and see the accumulative savings, they prove their worth. Exactly the same can be said with regard to supermarket loyalty cards and their respective members discounts. We no longer shop exclusively at just one supermarket but will go to specific stores to get deals on frequently used products.
There is one other area of potential financial savings that can be addressed but is often neglected due to customer apathy and fear that it may all go wrong. That is changing bank accounts, credit cards or moving your savings. It never ceases to amaze me how some folk will chase a deal online or in the actual stores but are quite content to let their wages stagnate in a current account with little or no benefits, or who miss out on higher interest rates by not moving their savings around. Legacy banks are no longer the best default options and there are now plenty of new online only institutions that are trying to increase their market share. The incentives on offer are not just purely money based. Many banks offer “freebies” such as subscriptions to services such as Netflix and Spotify. Plus transferring an outstanding credit card balance to a new providers can still yield substantial benefit. I guess people treat their banking differently from other services, when it really isn’t.
However, I don’t advocate turning cost savings into an all consuming ideology. For example, I will from time to time buy “reduced” label items in the supermarket but I have no intention of living exclusively that way. Some brands have a cost that simply doesn’t fluctuate and don’t have an immediate lower cost equivalent. For example, I won’t eat cheap biscuits from pound stores just to save a few pennies. I’d rather have some good quality indulgences from certain stores, than a larger quantity of inferior products, from a discount outlets. Like many things in life, looking for a deal needs to be tempered with common sense. Another essential tip is to visit websites that collate information on the best deals available, such as Uswitch in the UK. Or to follow people like Martin Lewis on social media, who have made consumer advice their career. Making savings to your monthly expenditure is no longer an optional extra but an imperative. Good luck in your pursuit of a good deal.
