Why we women in the squeezed middle face a VERY bleak winter
Sometimes, I wish Id never moved to the Highlands of Scotland. The weather has already turned decidedly chilly, and the temperature is set to fall to minus three by the weekend. Inside, the temperature is only marginally warmer but like so many families across Britain, we havent yet turned on the central heating. My brood spend evenings resignedly pulling on another woolly jumper.
Each morning I log on to our online banking account with trepidation. My income as a writer has tumbled as publishers slash their rates and tighten their belts, and the B&B my husband runs from our home is frighteningly empty.
So too are our wallets, because, like the rest of the country, our outgoings are soaring. With inflation surging to 5.2 per cent, living standards everywhere are being squeezed. The electricity bill has doubled in the past two years, and itll be topped off by a rise of another 19 per cent this year.
Feeling the pinch: Rising energy costs are causing many of us to try and avoid using central heating
Our oil bill (we dont have mains gas, so oil is used for all our heating and cooking) averages out at a whopping 400 a month spread across the year. To fill our two cars with petrol costs about 84 per tank, and for the first time in my life Im viewing petrol as a luxury commodity. All journeys are strictly rationed.
Welcome to the reality of life in the world of the squeezed middle. This winter, the Appleyard family finances are going to be laced tighter than the dowager Lady Granthams corsets. Im beginning to approach each day with the pinched and wary look of dear Dame Maggie Smith, wondering when the next financial hammer blow w! ill fall .
Last week, the Institute for Fiscal Studies reported the biggest drop in income for middle income families for 35 years, and predicted that families like ours are unlikely to land sunny side up until around 2016.
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It reports an unprecedented collapse in living standards which is hardly likely to make you want to rush out and blow the credit card on choice items from the latest Karen Millen winter collection.
Indeed, I found myself walking around Jigsaw in Edinburgh recently stroking the clothes. Oh, the lovely softness of the new winter range big fluffy dove-grey jumpers and gorgeous cashmere dresses. But the prices! 295 for a dress! Are they joking? For the first time in recent memory I found things I loved and bought nothing.
I am now scared about money and I know that I am not alone.
We all absorb the headlines about how were going to have to tighten our belts and pay off our credit card debts, but it only really begins to hit home when the bank phones as ours did last week to ask us how much money we intended to pay into our account over the next few days. My husband and I had gone over our overdraft limit.
Overdran and scared: Writer Diana Appleyard is preparing herself, and her family, for a tough winter
Of course, the answer nothing did not go down well. So yes, the reality check in our household has not so much arrived as crash landed.
The line between feeling relatively wealthy and thinking you may actually go under turns out to be thinner than I expected. Weve teetered just under our overdraft limit for years (who hasnt?), but suddenly the rising cost of living has made us realise we may not be able to afford our lifestyle and thats a horrible feeling.
Like many families, we borrowed up to the hilt for our mortgage, took out two car loans, pay our utility bills, home insurance, council tax, mobile phone bills and life assurance by monthly direct debit to spread the cost, and thought little about it. Each month, there seemed to be just about enough to pay everything off and have the odd posh meal out, buy a new dress or save for a foreign holiday.
But in 2011, we are genuinely facing a winter of discontent. Everything from our supermarket bill to the home insurance has gone up. We need to earn a small fortune each month just to pay all the standing orders and direct debits. Im seriously worried we may lose our much-treasured and hard-won family home.
MONEY-SAVING TIPS FOR THE 'SQUEEZED MIDDLE'
Diana Appleyard now knows all about trying to save the pennies
- Register for online banking. If you keep constant track of your bank account, youre less likely to splurge on unnecessary purchases.
- Check to see if you can get cheaper electricity and gas using a website such as uswitch.com or ukpower.co.uk.
- Go through all your direct debits and standing orders with carefully. Youre probably paying monthly for things you do not need or do not use.
- If your child is over 16, encourage them to get a holiday or weekend job. You wont have to pay for everything then, and it is very good experience for them.
- Websites such as quidco.com offer vouchers for cinema, restaurants and the theatre.
- Compare prices in local shops with ! those at the supermarkets. Shopping locally may prove cheaper and youre less likely to make impulse purchases.
- Stop using your credit/debit cards and pay cash for everything you need.
- Do you really need two cars? Bus and coach travel is efficient and cheap, or you could use your bike.
- Fun does not have to equal spending money. Children can have fun baking, running around outside or watching a film with you.
With one child, Charlotte, due to start a university course next September, and an older child, Beth, whos recently graduated and now back at home looking for work, we are also trapped in a pincer movement of supporting two adult daughters.
With graduate unemployment running at 20 per cent (a 15-year high) we have the cost of keeping our elder daughter at home, while paying rent, living expenses and possibly tuition fees for the younger one.
If she chooses an English university, her degree course will cost us 9,000 a year in tuition fees, plus at least 15,000 in rent and living expenses. If she can find a suitable degree course in Scotland, there will be no tuition fees but still rent and living expenses. Unless we want her to emerge with huge debts, well have to contribute. Its enough to make you want to put your head in your hands and weep.
Sam Dunn, deputy editor of Money Mail, says: This winter will be a very tough slog for the majority of households, with finances stretched to the absolute limit. Theres rocketing fuel bills, soaring food inflation and eye-watering prices at the petrol pumps, not to mention the cost of Christmas.
With the average bill for the festive season likely to come in at around 600, itll mean more people will be forced to borrow to cover their costs.
This is the absolute last thing we want to see as, with plenty of salaries being frozen and worries of redundancy in many sectors. Yet more expensive debt will risk pushing more families closer to the financial edge.
And its not just low inc! ome fami lies who will be hit particularly hard; even those where both partners earn the average wage 26,000 a year are seeing most of their disposable income eaten up by all the bill rises across the board.
As a family, we are trying hard to combat those rising fuel bills. This week, I have been frantically applying for a loft insulation grant (we have no loft insulation, so our precious heat wafts off into the atmosphere) and wondering if we can get a grant to erect a wind turbine. We certainly cant afford to carry on paying around 400 a month in electricity bills.
The Wilks family, who live in a three-bedroom detached house in Birmingham, are facing their own winter of discontent. Lisa, 41, works in HR and her husband Stephen, 42, works as a driver. They have three children, Jake, 19, Joe, 11, and Jack, who is seven.
The familys joint income is 55,000 a year. On paper, we should be well off, says Lisa. But at the moment, once we have paid all the bills, there is hardly anything left and this winter it is going to get worse.
Weve just sold one of our cars because we cant afford the petrol prices, so I am now walking to work. I havent bought any new clothes for months.
I shop around for the best deals and have changed our electricity and gas suppliers to try to save money.
Every time I go shopping for food, I am so worried. Our weekly supermarket shop costs around 160, and then I have to top up during the week as well.
I cant believe how the price of things have soared in the past year and theyre still going up. In the past two years Id say our costs have doubled.
Support: Diana's eldest daughter, Beth, has moved home after university because she could not find a job
Before then, families like ours were comfortably off: not wealthy, but comfortable. Now it is just a constant struggle.
Every night I go round the house and tur! n everyt hing off. We dont make anything but essential car journeys, and I havent switched the heating on yet. I try to save money by using websites like Quidco, which give you cash back when you switch your supplier, and I use all the vouchers and loyalty cards at the supermarkets.
I used to think nothing of splashing out on little luxuries, such as clothes and restaurant meals, but the reality now is that we cannot afford anything like that.
For many middle-class families, university tuition fees are one of the greatest costs they face.
Headmaster Peter Kent from Rugby is married to Sian, a housewife, and the couple have three children Hannah, 20, Andrew, 17, and Matthew, 14. Hannah is already at university, and Andrew hopes to start this coming September.
Peter says: If you dont help your children financially, then they are likely to leave university with a debt of 50,000 and thats a conservative estimate. Frankly, the cost of living and rising tuition fees are putting tremendous pressures on families like ours.
WHO KNEW?
In a recent survey asking women what keeps them awake at night, 30 per cent said money worries
Were going to help our children as much as we can, but our domestic budget is going to be really squeezed and were making plans as to how we can save money.
Were already helping Hannah with her university costs, and we have two younger children still at home. It is very difficult. Were not spending on holidays or treats, and even Sky TV is a luxury.
I am trying to find the most cost-effective deals on energy bills and our broadband supplier. I think many families like ours are going to go through their finances with a fine-tooth comb.
Of course, middle-class families still have a life thats better than many, and were not on the poverty line. But realising your future is not as assured as you thought it was, and that something really bad losing your home, for example is not beyond the realms of possibility is a terrifying ! prospect .
In the good old days when credit grew on trees, we always thought we could borrow our way out of a financial mess. Now, however, that safety net has been whipped away and the financial chickens of profligate spending have truly come home to roost.
We only have ourselves to blame for not saving in the good times but its going to mean a very bleak and shivery winter.
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