Financial survival plan when bills are rising

After a push in the prices of gas and fuel, the interest rate rise further turned the screw on many households. Energy bills are already set to be twice as much high as we're in the last winter and are expected to rise in the spring as well.

Worried households are now figuring out ways to let up the effect of rising living costs on their budget. According to some reports, people are skipping meals, have banned takeaways or dine-out, and managing to live without heaters turned on round the clock.

These rigorous strategies are, unfortunately, not enough to keep the wolf from the door. Another report has revealed that people are being pushed to borrow money at high-interest rates, increasing the risk of the debt trap.

This blog discusses what you can do amid the soaring mortgage, rent, energy, and food bills.

Monthly rent

Being able to rent a room has become a big thing now – something which is a dream for many. Since April 2022, there has been a sharp increase in rent by 45%. Not only is this a sign of worry for tenants but also for landlords.

Many landlords have buy-to-let mortgages on an interest-only basis. Although refinancing is an option, it is still not a good idea, as interest rates are continually rising. Many are thinking of pushing up rents, but the fear of not finding a tenant able to afford increases is putting them off.

What to do

First off, if you are reusing teabags, putting on another layer, and taking short showers, just stop it. Many people have been using these tricks to free up money to use as rent, but they are just ridiculous.

You should ask for an increase in housing benefits instead. If you have a good relationship with your landlord, you can negotiate. If nothing works in your favor and you fall behind your rent, you should contact your landlord and tell them what you can pay and ask for more time.

Do not ignore the situation. Otherwise, your landlord can start the eviction process. Even if you do not get a chance to communicate with your landlord, you keep paying the minimum and have a record of all payments. This will likely help in case your landlord sues you.

Household bills

Food, fuel, and energy costs are rising, and the increase records 10% inflation. Credit card bills are no exception. The interest rates for personal loans have also gone up. The current budget of people cannot stand the current inflation rate. Therefore, they are funding their essentials with no guarantor loans from a direct lender.

What to do

You should create a budget, so you know how much and where your money is going. You must have clarity about incomings and outgoings to stay on top of your expenses. Whether you use a budgeting app or a manual spreadsheet is up to you.

Try to open a separate account and keep the money for direct debits like rent, energy bills, debt payments, etc. Then what you are left with is what you can spend. You will at least know the essentials are being met.

To save money on heating bills, you should not keep your appliances on standby mode. Turn the thermostat down a few degrees and stop overfilling a kettle.

Monthly Mortgage

Interest rates for mortgages have gone up regardless of their type. A rise in interest rates means buyers would now have to pay hundreds of pounds more every year. It is expected that the rates of interest will further go up to stabilize inflation.

Some mortgages are on fixed-interest rate deals, so they are safe from the latest interest rate rise. Unfortunately, this protection is fleeting.

What to do

If you are unable to afford monthly mortgage payments, you have the option to reduce the size, although it will increase total interest. Use an online mortgage calculator to see how much the monthly payment will reduce if you extend the term. This will help you have an idea of the extension.

However, it is essential to note that a lender will likely run an affordability check to whittle down the size of monthly payments. Some lenders may bar you from applying if you are already in arrears. If you feel that you cannot afford monthly payments, you should immediately talk to your mortgage provider before you fall behind the payments.

To wrap up

The cost of living is rapidly rising; unfortunately, it is expected to rise even in the spring. You may be tempted to borrow money to cover some of your expenses, but this can add to your financial problems.

Create a budget, set aside some money, and give priority to your essential expenses. If you have a problem, talk to lenders, landlords, or anyone who could help with a particular situation.

Sponsor Ads

• Ad Space Available - Rent it Now!

Report this Page

Created on Dec 1st 2022 00:05. Viewed 110 times.

Share on APSense

Comments