Saving money and keeping family expenses up to date: Utopia or achievable?

Inflation of 3.8% can give the feeling that people have less and less money. How can people feel more secure about their expenses? This article will explore the possibilities

The pandemic crisis ended three years ago, but we are still suffering its economic consequences. According to Money Charity, between 2023 and January 2024, 333 people a day declared insolvency or bankruptcy. Adding to this, the labor market is becoming tougher. According to the Office for National Statistics (ONS), 4.4% of people were unemployed between February and April 2023.

All these statistics leave us to one question: Is it possible to save money in the UK or is it just a utopia?

Is it Possible to Save Money in the UK?

Given this scenario, it is normal to feel frustrated when it comes to paying expenses and monthly bills. If all the money goes to bills, how can someone save for significant goals like a vacation, buying a new car, or purchasing their first house?

For example, there has been a 1.8% decrease in the average first-time buyer house price, and it can take up to 11 years to save for the first deposit.

Although saving money can be challenging (and a bit discouraging), it is not impossible. Developing better habits is crucial to improving the financial reality for Britons.

Some advice from MoneyHelper includes making a budget to track exactly where the money is being spent.

Tips for Better Financial Management

Here are some good habits to adopt:

• Goal Setting:

This allows individuals to prioritize needs, set realistic savings goals (vacation, child’s education), and allocate funds accordingly.

• Debt Management:

Understanding interest rates, different debt types (credit cards, mortgages), and repayment strategies can help families manage debt effectively. They can avoid high-interest loans, prioritize paying off existing ones, and develop a debt repayment plan.

• Informed Spending:

Comparing prices and shopping around for better deals can help save money. Utilizing resources like unit pricing in supermarkets can lead to cost-effective choices.

• Avoid Impulse Purchases:

Focusing on the main expenses is essential for better financial management. Families can use prepaid credit cards like Neosurf.

• Long-Term Planning:

Understanding financial products like savings accounts, investments, and retirement plans allows families to start saving early for future goals. They can make educated decisions about investments based on their risk tolerance and time horizon.

Financial literacy will empower families to create a budget, track income and expenses, and identify areas to cut back.

Is the UK’s economical scenario going to change?

Not everything is negative. According to the Office for National Statistics, there is a positive sign for the next quarter of 2024, with a 0.6% increase in GDP compared to the previous quarter.

On the other hand, the economy is expected to experience slow but steady growth in the coming months, with forecasts ranging from 0.3% to 0.5% for 2024. Some acceleration is expected in 2025.

Overall, the UK economy is emerging from a slowdown, but its recovery is fragile. Continued monitoring of inflation, interest rate changes, and global events will be crucial in determining the country’s economic trajectory in the coming months and years.

In the meantime, financial education, fostering open communication within families about money matters, will help reduce risk and improve their savings.