The headlines remind us of rising prices, political uncertainty and expected recession pushing many of us into a new, focused determination to get to grips with our money so we can navigate our way through these choppy waters.
For some, that means deciding to pay down the outstanding credit card debt. For others, a renewed focus on putting money away in the rainy day fund, retirement account or other long term investment.
And for some it may mean a determined effort to cut all unnecessary spending and to make the household budget go further to offset rising prices.
Focusing on any one of these areas can help improve your overall financial picture, but being too focused can actually have less than ideal results.
For example, you want to hit that credit card balance on its head for good, so you focus on throwing everything you can at it. Because you’re putting every spare penny towards the debt, you’re not putting any money into a cash savings account to cover you in emergencies.
That might feel okay and you might say that if you have an emergency you can always use the credit card again. But the reason that you had the debt running up in the first place, may be because life gave you a series of “emergencies” that needed to go on the credit card, and you could be setting yourself up to simply stay in that debt cycle long term.
If you’re focusing solely on building a pot of wealth for the future, because you’ve got worries about the long term economy, you might choose to save or invest every available surplus pound.
Or you might be working on every possible way to cut the grocery bill and household spending, to offset rising prices and the highest level of inflation we have experienced for decades.
In both these cases, restricting yourself fully now, in order to satisfy potential future needs, may mean you feel deprived now. By focusing on cutting back everywhere, you may feel that you can’t justify any sort of treat, and that if you succumb to spending on something unnecessary you might feel guilty or in some way a financial failure.
Similar to getting a healthy balanced diet instead of being on a starvation diet, we will get better long term results financially if we have a balance.
Focus a bit on paying down debt, a bit on building a cash savings pot, and allow yourself a bit for a treat whilst also making the most of your shopping budget.
It may not immediately feel as though you are getting the results you want, but over the coming months, you’ll be more likely to stick to your plan and succeed, making whatever recession we’re in for, easier to get through.
For more from Norfolk-based financial expert Kim Uzzell head to mymoneymovement.co.uk or follow her on Instagram @kimuzzellmoneycoach.
YOUR MONEY MATTERS
Each week the EDP brings you tips and advice to help combat the cost of living crisis...
TIP OF THE WEEK
Have you paid too much tax? MoneySavingExpert.com offer a tax code calculator to help people check if they have been correctly set up. They estimate that millions are wrong every year but point to rules stressing the responsibility is on the employee to check that their code is correct and not the employer of HMRC.
BARGAIN DEALS
Free and cheap entertainment is always welcome for parents during the summer holidays. The annual Head Out, Not Home programme of free live entertainment has returned to Norwich city centre, running until September 4. Head to visitnorwich.co.uk for full details, with music on the streets this Sunday including folk act The Trials of Cato performing outside The Forum between 12.45pm and 3.10pm.
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