When your monthly outgoings are bigger than the money coming in, it can feel like you’re stuck in a hole you can’t climb out of. Rising living costs mean more households are facing this problem, and it’s not always easy to know what to do first.
In this guide, we’ll help you spot the warning signs that your spending may be too high, share practical ways to cut costs, and explain what professional debt management solutions may be available to you if you’re already behind on bills.
How do you know if your expenses are too high?
Sometimes it’s obvious you’re overspending – for example, if you can’t pay your rent or mortgage on time. Other times, it creeps up slowly until you realise you’re relying on credit to get through the month.
Here are some signs your expenses might be more than your income:
- You miss or delay paying bills – Late payment fees can add up quickly.
- You use credit cards or overdrafts just to cover essentials – This can lead to mounting debt.
- You can’t save anything – Even a small monthly saving is a sign of financial breathing room.
- Your debts are growing – If your total balance is going up despite making payments, interest is outpacing you.
- You feel stressed or anxious about money – Constant worry about finances is a sign things need to change.
If one or more of these apply to you, it could be time to take action.
How to reduce your monthly expenses
Small changes can add up to big savings. The aim is to make sure your essential costs are covered and cut back on anything that isn’t vital.
Track your spending and set a budget
Start by writing down every payment you make for a month – rent or mortgage, bills, food, travel, entertainment, and even small items like coffee or snacks.
Once you can see where your money goes, create a simple budget. Give yourself a set amount for each category and stick to it. Apps and online banking tools can make this easier.
Negotiate with your lenders
If you’re finding it hard to pay your credit cards, loans, or other debts, speak to your lenders as soon as possible. Many people avoid making contact because they’re worried about the response, but most lenders would rather work with you than see you fall behind.
You can ask if they’re willing to lower your interest rate, reduce your monthly payment, or offer a short payment break to give you some breathing space. Even a small change to your agreement can make a big difference over time.
Optimise Your utility usage
Energy and water bills take up a big chunk of most households’ budgets. You can cut costs by making a few simple changes at home. Switch to energy-efficient lightbulbs, turn off appliances when you’re not using them, and only run washing machines or dishwashers when they’re full, for example.
Taking shorter showers instead of baths can also help reduce water and heating costs. It’s worth checking if you’re on the best tariff for your needs – comparison websites make it easy to see if another supplier could save you money.
Cancel unused subscriptions and memberships
Regular payments for gyms, streaming services, apps, or magazines can quietly drain your bank account. Go through your bank statements and make a list of subscriptions you no longer use or could live without.
Even cancelling a few low-cost services can put extra money back in your pocket each month – and you probably won’t miss them as much as you think.
Plan meals to reduce food waste
Food shopping is another area where costs can quickly spiral. Planning your meals for the week ahead means you only buy what you need and are less likely to waste food. Check your cupboards and fridge before you shop, write a list, and stick to it.
Batch cooking is also a good way to save both time and money. By making meals in larger quantities and freezing portions, you can avoid the temptation of expensive takeaways when you’re short on time.
What to do if you can’t pay your bills?
If you’ve cut back but still can’t cover your bills, don’t bury your head and ignore the problem – there is help available. Whether it’s your rent, energy bills, or loan repayments, the sooner you take action, the more options you’ll have to get back on track.
If you’ve already cut costs and still can’t make ends meet, it’s time to focus on protecting the essentials and finding extra support. The steps below are ones you can take right now to ease the pressure and prevent the situation from spiralling out of control.
- Prioritise essential bills – Rent or mortgage, council tax, gas, and electricity should come first, as missing these can have serious consequences.
- Contact your creditors – Explain your situation and ask for temporary payment arrangements.
- Check for extra income – You may be entitled to benefits or support schemes. The UK Government and Money Helper websites have online calculators.
- Seek professional debt advice – Speaking to a debt adviser, or debt solution specialist like MoneyPlus, can help you find a solution that works for your situation.
For free advice, you can visit Money Helper. Alternatively, at MoneyPlus Advice, we can help you explore options like Debt Management Plans (DMPs) or Individual Voluntary Arrangements (IVAs), which could make your debts more affordable.
