IIt feels like Britons have jumped out of the pot, only to fall straight into the fire as a major cost of living crisis grips the nation just as Covid-19 seemed to have subsided.

As gas prices rise steadily and checkout totals increase with every weekly shopping trip, millions of people have been faced with the “eat or heat” choice – forced to choose between forgoing a meal or heating their home.

According to the Office for National Statistics (ONS), around nine in 10 adults (87%) in Britain reported that their cost of living rose in March alone, with rising energy prices fueling the soaring. The wholesale price of gas in January 2022 was almost four times higher than at the start of 2021, with limited natural gas inventories and supply issues driving up gas prices globally.

It doesn’t stop there, as the energy price cap has risen a further 54% from April 1, 2022, which is expected to add £693 a year to the average household bill. Ofgem chief Jonathan Brearley said the price cap, which was intended to prevent households from being ripped off by energy companies, is set to rise further in October.

In addition, policymaker Michael Saunders of the Monetary Policy Committee warned that the UK’s inflation rate could beat the Bank of England’s (BoE) forecast by just over 10%, having already climbed to 9% for the year to April. It comes a week after the BoE raised base interest rates from 0.75% to 1% in a bid to contain an exponential rise in inflation.

It’s normal to have money worries, but it’s better to deal with them than to ignore them.

Nick Hill, Money and Pensions Service

As the cost of everything rises, debt charity StepChange has warned that more people are going into debt as they struggle to pay bills and other commitments. The organization said Feb. 3 that “cost of living pressures” was among the top five reasons for debt among people who turned to it for help in November 202 and have remained there ever since.

So how can people cope with rising costs and what help is available?

How worried should you be about the rising cost of living?

It’s easy to feel panicked and overwhelmed by the headlines right now, which are saturated with the cost of living crisis. It’s a serious problem and heralds a “worrying time for many households”, said Nick Hill, money expert at the Money and Pensions Service (MAPS). The Independent.

“One on three [households] say thinking about their financial situation makes them worried and nearly half admit they don’t feel confident managing their day-to-day money,” he says.

“While we cannot ignore the challenges people are facing, it is important to remember that you are not alone. It’s normal to have money worries, but it’s better to deal with them than to ignore them.

However, if you’re feeling anxious and panicky about the news, it might be helpful for you to turn off the news and focus on your own financial situation. You may find that you don’t have as many problems as you think, says Jasmine Birtles of MoneyMagpie.

Birtles, who founded the financial advice website, says The Independent“We’ve had a lot of people contact MoneyMagpie in a panic over the state of things, that’s understandable. It could be really helpful to turn off the TV, take a deep breath and look at your own situation, because it It is quite possible that it is not as serious as has been suggested.

Where do I start to manage my finances?

Hill and financial coach Bola Sol recommend people start learning how to budget to better manage their money.

Sol, author How to save ita guide to straightening out finances, tells The Independent“I would always say start with budgeting. At this point, manual budgets — like spreadsheets or using notes on your phone — aren’t enough.

“Use an app linked to your bank account so you can keep track of your money at all times and clearly see what’s coming in and what’s going out. Apps like Emma will show you where certain bills have gone up and comparisons where you can get cheaper services .

“Once you understand your expenses, you can reprioritize. Maybe delay buying lunches or reduce buying takeout to twice a week, for example.

Use an app linked to your bank account to keep track of your money at all times and clearly see what’s coming in and what’s going out

Bola Sol

Hill adds, “It doesn’t have to be difficult to start [on budgeting] – there are many free budgeting tools available online, such as the MoneyHelper budget planner, which will help you understand exactly where your money is being spent and how much you have received.

Constantly reviewing your budget is one of the most “essential” things you can do to impact your savings. Incoming and outgoing transactions fluctuate based on our needs, so it’s good to stay on top of them, says Hill.

“Checking your direct debits and standing orders will allow you to identify where you could reduce your costs. If you’re not using a particular subscription, check for exit penalties and cancel if you can.

“If your financial situation allows it, you can even invest this money in your savings each month – every little bit counts.”

In what areas can I reduce my expenses?

This is a good time to check with your suppliers to make sure you’re getting the best deal possible. While it’s not possible to get a cheaper deal on gas and electricity right now due to price caps, you can still save on your current broadband and phone deal.

“You should call your [broadband and phone] supplier first – they may be able to offer you a better price if you are considering leaving,” says Hill.

Another area where you can save money is your groceries, adds Sol.

“Now more than ever is the best time to get really savvy with what you spend,” she says. “Keep an eye on supermarket prices and stay on top of your comparison game. For example, check the prices of the same item in a large supermarket and in the convenience store versions – most of the time they will be cheaper in the large supermarket.

“You can also get great deals on household items at super budget stores, like B&M, where they sell discounted cleaning products or shower gel multipacks. These are the types of small decisions that add up.

Sol also advises people to enroll in all available rewards programs to get the most out of their money.

“If you shop at Tesco make sure you have a Club card, get a Nando card if you are dining with your friends. You can get points with M&S Rewards every time you shop there, and Sainsbury’s has its Nectar card. Just make sure to get as many rewards as possible.

How can I get things for free?

The best way to save money is not to spend it, but that can feel extremely limiting when you can’t participate in society because you can’t afford it. However, there are a number of things you can do or get for free, if you’re savvy and willing to share.

“There’s enough for everyone as long as we share and help each other,” she says. “What more of us need to do now is get together with our neighbors and families and friends and see what we can share and how much we can support each other,” Birtles says.

There’s enough for everyone as long as we share and help each other

Jasmine Birtles, Money Magpie

Birtles recommends apps like OLIO, where communities and neighbors can share food or other items with each other to reduce waste. She also recommends using anti-poverty charity Turn2Us’ grant finder, which provides information on charitable grants that don’t have to be repaid.

“There are thousands of granting agencies across the country that will give people money under certain circumstances, just look them up and see if you qualify,” she says.

“Your local council can also potentially help you with a one-off grant from local charities or agencies. If you let your local council know that you are having difficulty, they can put you in touch with them.

What should I do in case of debt?

If you are on the verge of falling into debt or your previously manageable debts are now becoming overwhelming, you need to act fast.

According to StepChange, which provides debt advice, there are several ways to start managing your debt beyond budgeting, including providing extra income.

“If you’re working on a reduced income or your regular expenses have gone up in price, you may find that even after budgeting you need a little more to cover your debts,” a spokesperson said. of the charity. The Independent.

“In these cases, bringing in a little extra cash can be essential, and it can be easier than it looks.

“There are lots of ways to earn a few extra bucks, like using cashback websites or selling unwanted products online – the StepChange website is full of ideas. If you’re receiving benefits, remember that everything additional income may affect the amount you are entitled to.

You should also try to “avoid any credit that you cannot predict with good certainty whether you will be able to repay at the end of the month” in case your income takes a severe hit.

“Instead, we recommend considering whether purchases can wait until you have the cash, instead of using services like Buy Now, Pay Later. If you need to use credit, try to use it only when you are sure you can repay it on the due date.

If you are still having difficulty and you find yourself with a negative budget or arrears on priority domestic bills, do not hesitate to contact an over-indebtedness counseling organization.

The Stepchange spokesperson says: “Many people who come to StepChange struggle alone for months or even years and then tell us that they wish they had contacted us sooner.

“Financial shocks like illness or unemployment, rather than overspending, are the most typical causes of debt. But whatever the reason, the experience of being in debt is stressful. why it’s important to know that help is available, online, 24/7, from StepChange Don’t let worrying about debt take over your life – taking this first step could do the trick all the difference.

If you are having difficulty with your financial situation or your debts, you can contact StepChange or any of the charities and groups mentioned above. Stage change offers online debt adviceor you can call them on 0800 1381111 Monday to Friday 8am to 8pm and Saturday 8am to 4pm.