The cost of living crisis is real and is changing the way we view money. Money was a tool that caused us to thrive and a lot of people took it for granted. In these days, this view has completely changed. Money causes a lot of happiness for a lot of people, but now the reality has hit and opinions have changed. Even though money is always on our minds, our thoughts have changed from positive to negative.
The crisis is real and is affecting a lot more people than imagined. It has come at full force and the impact has really hit home. There are a few global contributors to this crisis, these include;
The Covid-19 Pandemic
Covid had a major impact on our economy and put consumer spending on hold which led to a huge snowball effect for all businesses. All non-essential businesses were forced to shut their physical stores, impacting smaller and independent firms hugely, causing some businesses to go into administration and close their doors forever. Many people were unemployed during these times or on furlough meaning their disposable income decreased and their spending also decreased, therefore spending less on other goods and services, causing an inflation in prices as businesses were struggling to make a profit.
Russia-Ukraine War
In February 2022, a war between Russia and Ukraine started, triggering many businesses to stop operating in Ukraine following Russia's Invasion into the country. Russia and Ukraine are both major suppliers and exporters of certain products. Russia are major exporters for fuel and gas and Ukraine are major exporters for agricultural products like sunflower oil. The war has created many issues in the exporters to other countries and so there have been major shortages, leading to a significant increase in fuel and food in other parts of the world.
Issues with the supply chain
There have been many issues that have arisen within the supply chain of goods after the Covid-19 pandemic. After the pandemic, there has been a significant increase in demand for goods in general and this has caused a shortage of materials for the supplier, and so cannot meet the unpredicted increased demand of customers. Another thing that impacted the supply chain is staff shortages! Due to different countries having different lockdowns and restrictions, many people were unable to work, causing a delay in shipments and production of products.
Unfortunately, with the cost of everything rising, our wages are not. This leads to people not being able to afford what they use to and so we are being more cautious with what we purchase. Even day to day essentials are bringing a huge challenge to afford with the inflation in prices. People are finding every way they can find in order to cut costs. It has come to such extremities that we are having to sacrifice heating our own homes in order to be able to feed our families. People are struggling to fuel up their vehicles due to the huge increase in petrol prices and so find it hard transporting themselves to work and run their "normal lives". But what is this new normal and how long will it last?
Will this be the new norm? Will we continuously be worrying whether we can afford to put food on the table for our families and heat the house during the winter? The situation is constantly changing and it is so difficult to keep up with the constant changes in the environment that prices will constantly be changing and rates will constantly be changing. We don't know when the war between Russia and Ukraine will come to an end. There are so many questions and so little answers.
Some people use to take 'money' for granted and will just spend it on more 'wants' than 'needs'. However things have significantly changed and with such a short amount of notice for anyone to have been able to prepare for, so we are having to adapt to this new change and maybe the new norm?
We do not know when this crisis will end, but it is not expected to end any time soon, so we need to keep adapting to this change in order to survive. There are a few ways to do this, the number one tip given by experts is to set budgets. This is very significant as you can plan what you are going to spend to ensure you have enough for everything and you are prepared for the worst outcomes. Cutting down on unnecessary services is also a good way to cut costs, for example any subscriptions to magazines, streaming services, beauty subscriptions etc. These are not essential items and are things you can live without. There are a number of ways to cut costs and survive through this difficult period of inflation and rising costs, we don't know exactly when it will end but we just have to survive for now.
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