Cost of Living: How to Cut Expenses and Save Money

The cost-of-living-crisis has been ongoing since 2021, with climbing energy prices and increasing cost of groceries.

Even though interest rates are starting to fall, everyday costs remain high. Managing your money effectively is more important than ever.

The last cost-of-living payment went to bank accounts in February 2024. As of January 2025, there are no current plans to provide further cost-of-living payments.

If you need help to reduce your expenses or just want a little extra support during this cost of living period, here are some practical tips to get started and resources to explore.

Tip 1: Review and Analyse Your Spending

Understanding where your money goes is the first step to gaining control over your finances. It may sound simple, but it’s easy to overlook small expenses.

Start by reviewing your income and expenses using a bank statement or banking app. Go through a full month and write down all your spending. Divide these into categories like rent, food, utilities, and non-essentials (entertainment, subscriptions, shopping).

Repeat this exercise for another month with the same essential bills. This will help you see patterns and your average spending.

To make things easier, download our free budget planner here.

Keeping track with budgeting apps

Once you’ve analysed your spending, budgeting apps like Monzo, Emma, and Snoop can help you see where your money is going and identify areas where you can cut back. These apps allow you to separate your money into pots for different expenses, sort bills, and even save. They also highlight your monthly habits.

Keep in mind, though, that some apps charge a subscription fee for their premium features.

Tip 2. Reduce Utility and Household Bills

Groceries don’t have to eat up your budget. With a little planning, you can keep costs low while maintaining a balanced diet.

Energy-saving techniques and smart shopping

• Energy Efficiency: Switch to energy-saving bulbs, unplug devices when not in use, and consider installing a smart thermostat to optimise heating and cooling.
• Shopping Around: Use comparison sites like Uswitch or MoneySuperMarket to compare your bills and potentially find cheaper energy providers.
• Government Schemes: Check if you qualify for energy grants or discounts through schemes like the Warm Home Discount, Cold Weather Payments, or from your local authority, a Household Support payment.

Tip 3. Smart Grocery Shopping and Meal Planning

Food shopping doesn’t have to break the bank. With a bit of planning, you can reduce costs while maintaining a nutritious diet.

Cutting costs without sacrificing nutrition

• Meal Planning: Plan your meals for the week to avoid unnecessary trips to the shop. Use leftovers creatively to reduce waste. Need help? Tesco help you meal plan and creatively use leftovers here.
• Own-Brand Alternatives: Swap branded goods for supermarket own-brand products. For inspiration, check out Jack Monroe’s cookbook, which explains how she fed herself and her son for just £10 a week.
• Shop Smart: Look for discounts when buying your normal shop, but there’s also apps like Too Good To Go for meat, veg and sweet treats. Also, avoid shopping when hungry to reduce impulse buys.

Tip 4. Limit Non-Essential Purchases

Online stores make it easy to overspend, especially with tempting offers like free shipping or discounts for spending more. Practising mindful spending can help you stick to your budget.

Practicing mindful spending can help you stick to your budget.

The value of mindfulness in consumerism

• Pause Before Buying: Wait 24 hours before making a non-essential purchase. You might find you don’t really need the item.
• Unsubscribe: Cancel subscriptions you don’t use often and unsubscribe from marketing emails to reduce temptation.

Tip 5. Exploring Affordable Transportation Options

Owning a car involves ongoing costs like maintenance, fuel, and insurance. If these are stretching your finances, consider other options.

Carpooling, public transit, and other alternatives

• Carpooling: Share rides with friends or colleagues to split fuel costs.
• Public Transit: Check for discounts like student or senior travel passes.
• Cycling or Walking: For shorter journeys, consider biking or walking to save money and improve health.

Tip 6. Seek Discounts, Offers, and Loyalty Programmes

Make your money go further by taking advantage of discounts and reward schemes.

How to make your money go further

• Loyalty Cards: Sign up for schemes like Tesco Clubcard, Nectar, or Boots Advantage Card for discounts and points.
• Voucher Sites: Use websites like VoucherCodes or HotUKDeals to find deals.
• Cashback Apps: Earn money back on purchases using apps like TopCashback or Quidco.

Tip 7. DIY Approaches to Common Expenses

You can save a lot of money by learning to do some things yourself. Online tutorials make it easier than ever.

From home maintenance to personal grooming

• Home Maintenance: Small tasks like painting or basic plumbing can be done with YouTube tutorials, however we do advise that you check the credibility of the source and reviews before starting. You can also use Reddit communities to ask others or see how others are fixing things.
• Personal Grooming: Are there things you could do at home? Nails, shaving, or other grooming items could be done at home with a little bit of practice.
• Craft and Repair: Instead of replacing items, fix or repurpose them. For example, turn an old t-shirt into cleaning cloths.

Conclusion: The Journey to Financial Resilience

Saving money doesn’t happen overnight, but small changes can add up to big results over time. Start with these tips, make use of available resources, and take control of your spending. Navigate the cost of living crisis with these tools.

For additional support, check out organisations like Citizens Advice and MoneyHelper. Don’t forget to download our free budget planner here to kickstart your financial journey. These steps can help you manage the cost-of-living crisis and build a brighter financial future.