According to the latest Which? Quarterly Consumer Report, 6.6 million homes cut spending on essentials over the last three months. Are you one of them and where have you been trimming your budgets?
So, we’re technically out of recession – the UK economy recorded growth of 1% in the last quarter – but life’s still not a bed of roses.
Our latest Quarterly Consumer Report found that one in three people were out of money at the end of the month. With fuel, energy and food prices continuing to rise, lots of people have had to be meaner with their money.
Dipping into overdrafts and savings
I can sympathise. My bank account is almost always exhausted by the time the next payday approaches. On the weekend prior I tell everybody I’m ‘hibernating’. Most understand this to mean ‘I’m skint’, though one friend did ask whether I was part hedgehog (for the record, I’m not). When I do run out of money and I need to spend, whether it’s for a food shop or to top-up my travel card, I invariably find myself turning to my credit card or my overdraft.
That’s similar to the four million people who used their overdrafts in the past three months, or the 800,000 who took out a new credit card. And then there were the 4.8 million who had to dip into their savings to cover monthly spending. Something has to give.
Our executive director Richard Lloyd said of the findings:
‘Consumer confidence is at rock bottom. The government and businesses must give consumers confidence that everything possible is being done to keep prices in check and give people value for money if we are to see the consumer spending recovery that is so essential to the nation’s economic well-being.’
Where to make the cuts
I’ve decided I can’t go on any longer like this – I’m taking on the spirit of George Osborne and introducing some austerity measures of my own.
According to our report, 54% of people have cut down on entertainment and socialising in the last quarter. I’ve found myself doing the same, with more nights in front of the TV and dinner parties, rather than going to the cinema or eating out. In fact, I haven’t been to a restaurant for six weeks now – it used to be a weekly occurrence.
That ties in with the 44% of people who’ve cut back on alcohol and tobacco. Unfortunately, I’m still hooked on Sir Walter Raleigh’s weed, but I’ve always been a smoker of rolling tobacco. Still, I have found myself being more economic with it.
In my recent reassessment of expenditure, I was shocked to find out that I was spending over £450 a year getting my hair cut. Every four weeks (it grows quickly) at £35 a snip (I have an unruly mane) has built up into an expensive coiffure. I’m now resigned to a shaggier look and a healthier wallet.
What about you? Where have you been snipping back your budgets? And how do you cope when your bank account runs dry?