Khizar Mohammad from Islamic Finance Guru (IFG) gives Muslims practical tips on how to successfully navigate the economic turmoil we are all experiencing.
It’s no secret that we’re facing a cost of living crisis.
Recession after recession, the coming year doesn’t look too bright for many people with the cost of most things going up tremendously, but there is an upside. We can see it coming, which means we can plan for it so that when it does come at its worst, we’re relatively prepared.
To get through the rising costs of living, you have two options. Either you lower your expenses to cover what’s within your means, or you increase your income to cover your expenses.
In this article I go through the former option and walk you through nine simple steps you can take to survive the cost of living crisis. Most of these tips are generic and applicable in many countries, some might seem very obvious, but you’ll be surprised how many people lose £££s because of these tiny leaks in their pocket.
Tip #1: Review your contracts
Whilst it’s near impossible to get cheaper electricity and gas contracts, you can review other contracts such as your broadband and mobile phones. Our contracts are a monthly drain on our bank account. It’s time you sit down look at each of your contracts individually and ask yourself:
How long is left on the contract?
Are cheaper options available?
Can I downsize?
Switching mobile phone providers can get you a discount on your contract; moreover switching to SIM-only contracts whilst using your current phone is a good way to slash monthly costs massively. Use price comparison sites, such as Carphone Warehouse to find good deals. Similarly check out Money Supermarket or Uswitch to see if you can get a cheaper deal on your broadband contracts.
Tip #2: Review your subscriptions
Similarly to contracts, we often subscribe to things and forget about them long after we stop using them. Go through your bank accounts and look at every subscription going out and ask yourself?
Do I use this?
Do I need it in my day to day life?
A quick test would be to see if you used the service in the last month and if so, was the cost worth the usage? Did you make your membership back in the usage of the services? That will quickly answer your question. If you pay £40 a month for a gym membership and only been once, then it might be better to save that money and commit to home workouts. A £8.99 Amazon Prime membership might not seem like much considering the benefits, but if you’re not using them or barely making your money back, it’s better to save the money.
Tip #3: Meal prep
I cannot tell you how much money is wasted in groceries that aren’t used and are just thrown out. A great tip is to start meal prepping. Meal prepping is planning your meals out in the week – this helps you know exactly what you need to buy and in what quantity, reducing the size of your grocery shop, saving money and meaning less wastage.
All you need to do is sit down with a pen and paper, make a seven day chart and choose what meals will be made each day. You can use websites like BBC Good Food and Tasty to help with ideas, recipes and accessing quantities.
Tip #4: Save on groceries
Groceries are another essential and they’re going up so consider changing supermarkets for cheaper, budget ones such Lidl and Aldi. In addition, consider switching the brands you use. Rather than getting that Magnum ice cream that costs you £4, consider getting the supermarket’s own brand one which will save you a few pounds. Do this for each product and you’ll be surprised to find your grocery bill down by a third or even more.
Not to mention, cut out non-essentials such as snacks, fizzy drinks and unnecessary food. Meal prepping will help you with that too.
Tip #5: Cut down energy usage
Seems obvious, but a lot of people will fail at this. Martin Lewis from Money Saving Expert recommends people to “Heat the human, not the home.” Heating a whole home in the winter costs a significant amount in terms of energy, multiply that day-in day-out over many months and with current energy costs, you’ve got yourself quite the bill. Consider better ways to conserve heat, such as:
- Wear an extra layer in the house – a jumper, cardigan, socks, thermals etc. anything that’ll keep you warm in return for keeping the house a few degrees cooler.
- Get electric heated blankets for the night; instead of keeping the whole house warm in the night in winter, consider turning the heating off and everyone using heated blankets which use far less energy. Or just sleep with an extra layer on and double the blankets.
- Install a smart heating system such as British Gas’ Hive system so that you can optimise your heating to be on when you need it and off when you don’t. Turning your thermostat down just one degree can cut your bill by 4% so be smart with your usage.
In addition, watch your electricity usage by cutting down wherever you can, such as:
- Turn off “vampire devices” – these are devices that drain energy while they’re off such as your TV box, PCs on rest mode – the Energy Trust estimates this can save £55 a year
- Optimise your appliance usage – minimise how many times you use the dishwasher or tumble dryer. Make sure they’re full before turning them on, so that you use them less overall.
Tip #6: Check if you’re eligible for benefits
If your household income is below £30,000, then you might be eligible for benefits. Even if your income is slightly higher you may still qualify and it’s always worth checking especially if you have children. Given how much we’re taxed, we should have no shame in claiming if we genuinely need support. Use this quick 10-minute benefit checker to see if you’re eligible.
Even if you only qualify for a small amount, it can open the door to support such as council tax reductions and reduced utility tariffs.
Tip #7: Make Use of discounts, workplace benefits and cashback offers
Every little counts and not just in Tesco, but everywhere. We always walk past these great offers all the time. Be it your loyalty card points, credit card cashback offers or some workplace benefits that give you special offers, make sure you take advantage of them all. You might be saving a fiver here or a tenner there, but all of these add up and can amount to a couple hundred every month.
Tip #8: Take part in trials and studies
Did you know that you can often make an easy few hundred pounds or even a few thousand for participating in trials and studies. Ibrahim Khan (the IFG founder) gets £100 every month towards their groceries as part of a COVID study over the past two years. You can sign up at websites such as Trials4Us or YouGov.
Tip #9: Give to charity
Usually one of the first things people cut off in times of hardship are their charitable acts. Sure, this makes logical sense if it weren’t for what the Messenger pbuh revealed to us:
“Give charity without delay, for it stands in the way of calamity.” (Al-Tirmidhi)
In tough times it’s even more important to give in charity to protect yourself and your family from potential harms heading your way. Moreover, the Prophet Muhammad, upon him be peace, said:
“Charity does not in any way decrease the wealth and the servant who forgives, Allah adds to his respect; and the one who shows humility, Allah elevates him in the estimation (of the people).” (Muslim)
We shouldn’t think that by giving charity our wealth is decreasing; rather, there’s a metaphysical element that very much in a tangible way affects both our worldly life and afterlife.
To wrap things up, the key to surviving a financial crisis is to weather the storm and in order to do so, we need to do everything in our court to make sure we’re prepared to catch whatever ball life throws at us.
Khizar is the community lead at IFG. In his spare time he is a student at Al Salam Institute studying for his Alimiyyah degree. This article first appeared on the IFG website.