In June and July, annual inflation reached 9.6 percent in Ireland. Families are now facing the biggest cost-of-living squeeze since 1984.
The main drivers of the price increases are energy, fuel and food. Fuel, electricity and gas were up over 22 per cent year-on-year. Electricity prices were up over 40 per cent, while gas rose by over 57 per cent. Home heating oil has increased by 115 per cent since this time last year!
The cost-of-living squeeze is expected to see household bills rise by an average of €3,000 this year. A June study by Bonkers.ie showed that consumer prices in Ireland are 40 percent higher than the EU average and health costs are 72 percent higher! It is not surprising with all of this that a July survey by the Irish Mirror showed that ‘64% of Irish people feel they are on the breadline’.
‘Financial wellbeing is a state of being where a person can meet current and ongoing financial obligations, feel secure in their financial future, and is able to make choices that allow them to live life to the fullest.’ World of Work.
If you ask people in Ireland what they worry about most – the top factors are consistently family, relationships, health and money. With inflation reaching the dizzy heights of the 1980s – worry about finances is on the increase. Financial wellbeing is not so much about how much money you have – but more about how you manage what you have and whether you feel stress or confidence in terms of your finances. It is closely connected with all areas of your wellbeing. When other areas of wellbeing are strong - we can manage our money better and don’t seek expensive distractions as much. And we can more easily ask for help when we have good relationships.
Taking care of your finances: Firstly, remember that financial worth doesn’t define yourself self-worth.
If finances are tight, rein in expenditures immediately. Don’t rely on ‘hoping’ it will get easier / better. A friend that went bankrupt a few years ago said - the one piece of advice that she would give to her former self would be to ‘cut back immediately’. I have heard that echoed by several sage business mentors over the years.
Educate yourself. One US study showed that 70% of people feel anxious about their financial situation. Learning empowers you to act and take control.
Create a budget that works for you and stick to it. Save regularly - even a small amount. Your view of spending changes when you save regularly - whatever the amount.
Set financial priorities. A lady I spoke with recently chose not to go on a holiday overseas this year – because she wants ‘to have enough to fill the oil tank in September without stress.’ If you cannot do it by yourself, ask for help.
Talk about your finances to someone you trust – your partner – others. There are many free financial guidance support services available.
Have a rainy day fund. Invest in income protection policies to give you further security. Shop around and see if you can get a better deal with your various service providers. In your social circle plan low cost ways of socialising. Even if you have enough, others may not.
These increases affect everyone. Employers can and should show they care. They can give one-off financial support to staff if they have means. They can check in regularly with staff and do things to support staff boost their financial and overall wellbeing. Financial, like all problems solve much more easily when addressed in a timely manner.