The news is laden with doom and gloom about the cost of living crisis. But whilst these external factors can seem overwhelming, most of us have the power to take control of our finances. With the help of the brilliant money-management expert Clare Seal, we hope this article empowers you with information to make the best choices for your financial future.
Big picture thinking
Money management can seem overwhelming when we’re in the weeds. When all we can see is next month’s pay check. The next debt payment. The next house or car we’re vying for. Surrounded by negative news about the cost of living.
But Clare encourages all of her clients to take a step back and think about two aspects: the internal and external factors.
The external factors would be those such as the cost of living, inflation or a recession. They’re things we unfortunately cannot control. So if these are the only things holding you back from making moves with your money, consider workarounds (more onto that later) or just being patient. It might sound defeatist, but Clare makes a great point; “Things will get better again - we see this after every crash or financial crisis...I often tell my clients that sometimes the best thing to do is to press pause”. When we’re hitting the same brick wall of a situation we cannot change, it affects our well being and perspective on money. And often, the best thing is patience and putting those grand plans on hold - just for now.
Instead focus on what you can control…the internal factors. Often not feeling like we have enough money is linked to lifestyle creep. Increased spending when we have a new job, investing in a bigger house or better car because we feel we need it. But Clare encourages us to really think about what a lifestyle that makes us content and happy looks like. And if you’ve got most of those things in place you might not need anything else. We’re always encouraged to step forward - get a bigger house, a better car, go one better holidays. This list goes on. but by focusing on what we have rather than what we don’t we can re-establish our spending habits. Get out of the race of what everyone else is doing and refocus on the here and now - what makes you happy?
Diving into debt
Another aspect that causes more stress in relation to the cost of living is debt. Clare had her own issues with debt in the past and overcame it by starting with being 100% honest with herself. “Once you know all of the information, nothing can surprise you…start from there and work out what the minimum repayments are.”, Clare continued to say, “Debt isn’t something that defines you as a person or anything to be ashamed of.” Once you remove that stigma you can look ahead and make a plan. Clare recommends using the avalanche or snowball approach to debt management - both of which use accumulation and reward to help you hit your debt management goals.
Finally we have saving. It might seem simple but where do you actually start and make it less stressful in times of financial instability? Here’s some of Clare’s top tips
Sustainable side hustles.
Surveys, user testing and other side hustles; are they worth it? "Money is only one of the currencies and resources that we have in our lives. Time is massively valuable as well and so is your health. So if you’re staying up until 2am doing surveys every night to try and get to the next pay out it can have an impact on your health a day job’", Clare says. Instead she suggests looking at your skills and freelancing within this area - ensuring it doesn't have a negative impact on the rest of your lifestyle. Another route is exploring cashback opportunities. This is a pretty low effort way of banking money that you can utilise at high expenditure times such as Christmas.
Make savings automatic
“Pay yourself first”, Clare says. She recommends having a standing order or automatic transfer scheduled for payday (or shortly after) into a savings account. Make a plan within your means but start small. Once you’ve secured the habit you can then add more money to the pot. Remember to look into different savings accounts and pick based on what you’re saving for - shopping around for high interest rate or cashback accounts can be a great way to maximise your savings if you're not planning on touching the account for a while.
We hope this article has quelled some of your anxieties around the current cost of living crisis. Ultimately, there are aspects we can control despite the ongoing uncertainty. Once we focus on what we CAN control, the whole situation seems less intimidating and much less stressful too. To dive into more of Clare’s wisdom, check out her full PepTalk on demand or speak to our team to book a bespoke PepTalk.