How the Spring Budget affects you
Anyone who had been hoping the Spring Budget would solve their cost of living worries at a stroke would have been disappointed.
The media headlines focused on scrapping the limit on the amount of money you can put into your pension. The reforms to childcare should help people with young families, with support for parents who want to return to work or increase their hours from spring 2024.
For the rest of us, the highlight was the extension of the energy price guarantee at £2,500 for another three months to the end of June 2023. That should last until energy prices are expected to drop, which will help us all.
But money pressures are going to continue and, in fact, our money is going to have to stretch even further as costs continue to soar.
Prices are continuing to rise
The latest figures show that although prices were expected to have started levelling off by now, in fact they are continuing to rise higher than expected. In February inflation came in at 10.4%, when it had been expected to fall below the 10% mark.
Food prices actually climbed by 18.2%, the highest jump since 1978.
That means the price of our groceries leapt up by almost a fifth in the last year – no wonder we’re all having to tighten our belts a little more.
Will prices carry on rising at this level this year? In the short term, yes. But hopefully the level of the rises should start to ease off as shortages disappear, and the economy starts to recover.
Take control of spending with a budget
But we’ll still need to focus carefully on our finances and keep control of our spending. So, rather than look to the Government’s Budget to solve our cost of living worries, we need to turn to our own personal budget instead.
Do you make a budget for your finances? If you don’t you should. Don’t be put off by the word. It’s not a difficult process and all it means is planning your spending so that you don’t end up short of cash.
Simply write down your bills and outgoings and compare them to your income. If your income doesn’t cover your outgoings, then you need to cut back.
What can you cut back on?
If you’re not sure where to start, begin with your bank statement. Add up all the minuses to see what you’ve been spending in the past month or last three months.
If the figure is too high, then take action. Go back to the statement and look at the transactions – were there any that weren’t really needed?
High payments at restaurants or pubs are something to look closely at. If you are struggling with cash, these are things you can cut back on.
Clothes shopping is another statement staple that could be reduced. Tightening your belt means being ruthless about what is often called ‘discretionary’ spending. In other words, spending on things that aren’t really necessary.
By avoiding unnecessary spending could see your personal budget remaining healthy this year and beyond.
Get help with budgeting
You can get help online. The government’s MoneyHelper has an easy-to-use Budget Planner, and Metro Bank accounts come with tools to help you track your spending and see how you’re using your money. Once you’ve worked out what you spend on essentials, you know how much spare cash you have to spend or save.
