Cost of living: tips to help keep your finances in check

The cost of living is spiralling upwards in 2022 with food, energy, fuel and the whole spectrum of everyday items we take for granted costing more, we know that people are worried. So through our Big Issue Talks Money series, supported by Experian’s United for Financial Health programme, we asked a panel of experts if there are things we can do as we try to weather the storm.

Whether you’re stressed about spending, have questions about credit or you want to know how to negotiate with your employer, our money experts – John Webb, senior consumer affairs executive at Experian, co-founder of financial education app Your Juno, Margot de Broglie and Tara Gillespie, co-founder of platform and podcast Best Intentions – have picked out a few things that might help. 

Registering on the electoral roll, getting a current account and putting your name on utility bills can help

John Webb

Q: I’ve never had a credit card and I am wary of them, but I’ve heard that I need one to build a credit score which can drive down the cost of things like my broadband or mobile phone contract. Do I really need a card to improve my credit score? 

A: John Webb says: “A credit card is a great way to improve your credit score. Keeping the balance as low as possible, only using it for small essential purchases, and making the monthly payments will positively affect your credit score. But there are lots of other ways to improve your score, and build a healthy credit report. 

“Registering on the electoral roll, getting a current account and putting your name on regular household utility bills like gas and electric can help. If and when you need them, getting credit agreements like home broadband or mobile contracts will also help. 

“People can also improve their credit score using Experian Boost, a free credit-score-improvement service that takes into consideration everyday payments to subscription services, as well as regular payments to things like council tax and savings. 

“When you get a new credit account it takes around one year, making your repayments on time, to positively affect your credit score”.

Q: I have several old credit cards that I no longer use as I’ve heard mixed advice on whether to keep old cards or not. Should I cancel old credit cards or will this damage my credit score?

A: “If you’re looking at your credit score, then it’s generally a good idea to keep credit card accounts open,” says John. “Lenders like to see available credit which you’re not using a lot of, so this is good for scores.

“Lenders don’t like to see inactive accounts though. So, it might be worthwhile using these cards to make small essential purchases and paying it off in full each month. This keeps the card active and the balance low, which lenders like to see.

“However, if you don’t need the card any longer, won’t use it, or are worried that you might spend money you can’t afford to repay, then you should close it. You may see a slight drop in your credit score, but it will likely recover over time.”

If you can, start by putting away £10 a month, take it out of your account on payday so you don’t spend it

Q: I have taken on more responsibility at work over the last two years, yet I’ve been on the same salary. I want to ask for a raise but I have no idea how to ask my manager. How should I approach the conversation?

“There are four steps to keep in mind when negotiating compensation,” explains Margot de Broglie. “Firstly, compare your salary with other jobs in your sector. Do your research; ask your friends what they earn and find out what people in similar roles are getting paid. Prepare to negotiate: employers are expecting candidates and employees to barter.

“Don’t forget about non-salary benefits too. Private healthcare is a potential benefit to consider, along with gym memberships and company cars. These things can all be useful if you will use them or spend on them anyway. Finally, be confident. Whatever your work experience, you can still lay out any volunteer roles or skills you’ve learned outside of the office that you’ll be bringing to the team”.

Q. I want to streamline my spending and try to keep some money aside, but I can’t seem to break the habit of impulse spending. I can’t see how I’ll ever be able to start saving – what’s your advice?

A: Tara Gillespie goes for some tough love: “Just start! It sounds silly but starting can be the hardest bit. The easiest thing to do is start small – if you can, start by saving £10 a month – and set up a direct debit out of your current account into a savings account for that amount on pay day. That way it’s out of sight, out of mind before you can spend it. Then you can think about increasing the amount when you can, little by little, until you hit your target monthly savings amount”.