It can be challenging to plan during tough economic times like the cost of living crisis – or fully understand the impact it’ll have on your finances. When it comes to planning, everyone’s financial goals will be different. You might be trying to find areas where you can cut down on spending or build on your long-term savings.

You might already have a written plan, or you’re making one for the first time. Either way, you can consider our top tips for financial planning whilst navigating the cost of living crisis.

Why writing your plan down can make a difference

Writing down our goals really does help us achieve them – whether this is physically writing it down, or digitally.

Having a written plan can help you be clear on what your priorities are and keep you on track so that you’re achieving your goals. If you’re not sure where to start, you can use our written plan template.

In our research, we identified having a written plan as being one of the 10 building blocks that make up good financial wellbeing. This is because people who take the time to set out a written plan have more clarity about their priorities, retirement preparations and aspirations.1

We find that good financial plans:

  1. Have clear investment and saving goals.
  2. Factor in what makes us happy and gives us a sense of purpose.
  3. Will help you achieve better financial wellbeing.

You can read more about the importance of written plans – and how to start one – in our Financial wellbeing index.

Review your goals

Writing down our goals is a good starting point – but it’s also important to check in regularly and update them as your circumstances change and evolve.

Regardless of the cost of living crisis, checking in on your short and long-term goals is always a good idea. As things aren’t easy financially, check if these goals are still realistic.

If you have a written plan already, look at what might have changed since the last time you checked your goals. Is there something you had written down that needs to be altered slightly?

Remember, your plan should be achievable.  Having slower progress on some goals while navigating a difficult time is understandable. If you’re after some professional support, we recommend speaking to a financial adviser. They could help you make the right choice for your circumstances and act as a financial coach. You can find an adviser on the MoneyHelper website.

Plan and prioritise

Keep on top of debt, bills and repayments

If you find that after adapting your budget you’re still struggling to cover all costs, try to focus on where you need to prioritise your money. There are some bills and payments that will require closer attention than others – that’s because the consequences of not paying off some bills and debt can be more serious. MoneyHelper has a great tool that helps you prioritise what bills or payments require your attention first.

Are you eligible for help?

Another aspect to fit into your written plan is the help the  government are providing. The £15 billion support package is intended to support households struggling with the rising cost of living. All households will be given a grant of £400 toward their energy bills. Those on means tested benefits will receive £650. There’s also extra help available for pensioners and those on disability benefits. The payments will be made via energy providers and government agencies, direct to those who qualify.2

Check if you’re entitled to other benefits – you can find out by putting your details into the free benefits calculator from entitledto.  

After you’ve factored these payments into your plan and think you’ll continue to struggle to pay your bills, contact your providers and explain your situation. Energy companies and other organisations sometimes offer support to those in financial difficulty.

Identify costs you can cut – and things to keep in your budget

As you go about your everyday life, tracking exactly what you’re spending your money on can be difficult. By monitoring your accounts – either via budget apps, online banking, or paper statements, you might identify areas where you’re overspending.

If you have a lot of subscriptions or have been spending a lot recently – ask yourself what you really need, what you use and enjoy, and what you wouldn’t miss. Then, by potentially cutting some costs, you can reprioritise where you’re spending, or saving, that money.

It’s important to keep aside some money to spend on things that bring you joy and purpose. If you’re planning to cut back on many luxuries, factor giving yourself some small treats into your plan. Financial wellbeing isn’t just about how much money you have – it’s also about having the right mindset and knowing what makes you happy.

Create a solid safety net

Having an emergency savings fund in place might help you create some peace of mind during times of financial uncertainty. Having a solid safety net will help you if you’re faced with any unexpected expenses. Consider having three months of your household expenses (rent/mortgage, food, bills) as a buffer in an easy-access savings account.3 You could also consider income protection and life insurance to help protect you from a sudden financial shock.

Stay calm and think long-term

Anyone investing over the long-term should anticipate short-term ups and downs. The value of an investment can fall as well as rise and isn’t guaranteed. The value of your pension pot when you come to take benefits may be less than has been paid in.

Investment markets can be affected by several different factors, including political and economic uncertainty, regional conflictsand environmental concerns. Any of these factors can cause markets to move up and down more than would typically be expected in the short-term (also known as market volatility).

When you’re adapting your plan, bear in mind that making short-term investment decisions may have an impact on your longer-term investment goals. Remaining calm and avoiding making sudden decisions that you might have not properly thought through is important. Please remember that a pension plan is a long-term investment – you usually can’t access your pension savings until age 55 (or age 57 from 2028).

  1. The New Social Contract: Future-Proofing Retirement. Data source, Aegon Retirement Readiness Survey, page 28, 2021.
  2. Cost of living support factsheet. Data source, GOV.UK, June 2022.
  3. Emergency savings – how much is enough. Data source, MoneyHelper, May 2022.


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