Surviving the cost of living crisis. #financefriday.

The UK’s cost of living crisis worsened yesterday when the Bank of England increased interest rates. They tell us we will get higher interest on our savings. I checked what Halifax had to offer, and they offer 4.5% on a regular savings account but it is only for the first 12 months.

High energy costs are driving the cost of living crisis. My energy company has set my direct debit higher than it needs to be. They have estimated my usage from now to the end of next January and want me to agree to pay a direct debit equivalent to that cost. I prefer my usage to be assessed at the end of spring like it used to be. That would make more sense.

Our discretionary incomes, that money we have left after we have paid for all the essentials is falling. If you have investments that makes your discretionary income higher but the risks associated with investing are also higher now because of government incompetence. The pandemic couldn’t be helped but Brexit was plain stupidity and the the same people who supported Brexit also gave us the Truss & Kwarteng disaster.

We can invest based on the disaster, though. I started investing following the 2008 disaster. I bought shares in Lloyds Bank at about 30p and sold at over 80p. Other investments didn’t go so well, but I survived and made a few quid overall. I saw Covid as another investing opportunity. I increased my investment in Lloyds this time. Their share price continues to rise as they close branches and make sound decisions. If the share price beats inflation, I’ll be happy. My one lousy investment was Marston’s. I hope they will survive these difficult times. I’ve been adding a few bottles of Bankses to my shopping each week and building a stock of beer for my summer barbecue. I’ve noticed the price has gone up 10%.

We always have to consider what is driving our spending. Some people spend on things that appear to be status symbols. I don’t buy clothes just for a famous name tag on them. I do spend more on clothes than I used to but I can afford to, and I do shop around for bargains. Besides status, stress also drives people to spend, particularly on alcohol. I like the odd glass of wine with my dinner, and I have a beer or two while I watch TV in the evening, but it no longer drives my behaviour. I have a ticket for the Euromillions Lottery tonight. If I win millions, I would like to do something for the community. I might spend a little on things I need. I’ll have the hedge removed in my garden and a fence put up, so I don’t have to worry about getting the hedge trimmed twice a year! Little things can make our lives better.

The cost of living crisis isn’t affecting me too much. I buy the things I need not what I am encouraged to buy by advertising and brainwashing.

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