Taking Control
As rising living costs and global events impact household budgets, taking proactive control of your finances is vital for your mental wellbeing and professional standards…
Taking Control in Uncertain Times
As we enter the new tax year, this is usually a good time to take control and review our finances.
World and domestic events are dominating both the headlines and our household finances. We have still to feel the full effect of the ongoing tension with Iran, oil and fuel prices continue to be affected by the repercussions of events. The Strait of Hormuz remains effectively blockaded with little to no oil leaving the gulf on this primary shipping route and in response, oil prices continue to fluctuate.
We have all experienced changes at home, whilst the energy price cap remains in place until July, other household costs, including Council Tax, have risen this month. It is estimated that UK households will be £480 worse off this year due to rising energy costs alone. Despite inflation running at around 3%, food and housing costs remain elevated compared with pre-2022 levels.
Persistent Cost of Living Pressures
At the same time, as cost of living pressures are increasing in the UK, personal debt levels have increased to £1.9 Trillion, with average household debt levels sitting at £66,940. Over half of UK households are cutting back or borrowing to manage essentials and balance commitments.
It is estimated that 22% of UK adults are considered financially ‘at risk’, struggling with bills and relying on credit. Credit card debt continues to rise, often becoming long-term and costly.
Why does this Matter?
Financial stress isn’t just a personal issue, although most don’t want to, or are scared to, discuss their finances or pressures they are experiencing, it can affect:
- Mental Wellbeing and Fatigue
- Decision Making Under Pressure
- Operational Performance
- Vetting and Professional Standards (PECSS)
Financial vulnerability is increasingly recognised as a risk factor in police vetting and integrity frameworks, making it even more important that people are honest around their finances and where needed, are taking control or accessing help. This is a welfare and health issue, there are always options and solutions to get help and assistance.
Take Control of Your Budget (Know your numbers)
Start with a simple monthly breakdown, take your monthly income and expenses, compare them and see how much you have left after all essential bills or debts have been paid. To take control of your finances and help you make any decisions, you need to see the full picture and assess all the information. You can use our budget tool, to help.
You’ll need all your income, don’t include any allowances or overtime that are not regular. Detail all your fixed expenditure (e.g. mortgage, council tax, utilities) and any variable spending (e.g. food, fuel, subscriptions, social activities).
When detailing your budget, it’s important to be honest and realistic, what your actual food and fuel costs are each month rather than what you would like or need them to be to break even.
Tips: Review all your bank statements to assess how much you are already paying. Check any recurring payments and direct debits.
You should also consider:
- Are there any subscriptions that you don’t use and could cancel to save money?
- Are there any impulse buys that made you feel good at the time but haven’t been worth it in the long run?
- When making an impulse buy, always think ‘do I really need this’ and if possible, build in a cooling off period of 24 hours before you commit to buying.
- Can you save money on subscriptions by reducing services or haggling around proposed services?
- Could you save money by making packed or bulk meals, reducing the number of takeaways or coffees that you buy?
- Are there cheaper or better options?
- Can you save money by accessing cashback sites or using discounts provided by operators like SPRA or Blue Light Card?
- Are there other discount cards you can sign up for?
SPRA and others often allow purchase of e-gift cards that can save you money on High Street and supermarket shopping. The Company Shop membership allows police employees, serving or retired, to access food and household items at a discounted price to reduce food waste in the UK.
Reduce Energy Costs
With energy continuing as a major pressure point on household costs, review your tariffs and check out your options, if needed switch providers to save money. Small changes can make meaningful changes over a year. If you have access to one through your provider, consider using smart heating controls where possible to track and reduce unnecessary usage.
When driving, consider your driving manner and vehicle. Fast acceleration and hard braking reduce fuel efficiency and can cost you more in the long run. If fueling up, consider whether you need a full tank or could you improve efficiency by only filling to half or three quarters, make sure your tyre pressures are correct for what you’re carrying. Does your boot always remain full, or can you remove the roof rack? Shop around, there are new fuel checker apps, like PetrolPrices, that will tell you the cheapest prices in your area.
Renewals
When it comes to renewals, the expert advice is not to auto renew and to instead shop around. Research suggests that the best time to renew car insurance is between 21-26 days prior to renewal, for house insurance this is 15 days prior to renewal.
Check your cover and ensure that you are only paying for what you need. There are lots of price comparison tools available that should make searching easier.
When buying car or home insurance, check to see if you would be cheaper packaging them all into one product or provider. The cheapest way to pay insurance is annually, if you’re paying monthly this is effectively credit and will generally increase the premium by at least 20%.
Check to see if you could save money by borrowing elsewhere or using a budget account to spread the cost, as these will usually have a lower APR. It is important to always consider the annual rather than monthly cost.
Build a Financial Buffer
When reviewing your budget, check out your credit and repayments. Could you save money by switching or consolidating debt? Always prioritise high interest debt (e.g. credit cards, overdrafts or loans with high APR’s). Consider consolidating balances and loans to lower rate options, if possible, avoid only making minimum payments as this extends the length and cost of any borrowing.
Tackle Debt Early
Where you can, try to save a little every month, even starting with £10 per month helps create a habit and starts building up resilience. Aiming for £500 emergency funds or 3 months’ expenses can help you if things take a turn for the worse.
Free Money Advice Service or Help
If you’re struggling to make ends meet or to pay priority bills, losing sleep or worried about your finances it’s time to speak to someone
Fortunately, there is lots of help available.
You can speak confidentially to lots of agencies, including staff associations, wellbeing champions, the Employee Assistance Program, the Benevolent Fund or to Scottish Police Credit Union. We may be able to help you consolidate debt, and if needed we also have a FREE Specialist Money Advice Service that is entirely independent and can also assist with advice around benefits or other entitlements that could be available.
Finally…
As police employees, we are trained to manage risk, stay calm under pressure and make informed decisions. Applying the same principles to your personal or household finances can make a significant difference.
At a time when almost every household is under strain, it’s important to take control and be aware of what’s affecting your finances and are there other options that could help.
Policing is unique and consequently we have access to a lot of support, whilst making that first step or contact is always difficult it can make such a difference in the long run to our personal and professional wellbeing.
Fortunately, there are trusted partners and sources, including the FREE, independent and confidential service provided by The Specialist Money Advice Service and sponsored by the Scottish Police Credit Union (SPCU), Scottish Police Federation (SPF) and CAB Motherwell & Wishaw.
The Scottish Police Credit Union was founded and established to help those within policing; we understand the unique nature of the job, we have both the knowledge and experience to provide the police family with financial help and support.
Tel: 0141 771 1314
Email: info@scottishpolicecu.co.uk
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