The cost of living crisis, caused by Covid, the war between Russia and Ukraine and inflation, has plunged people across Europe into money difficulties – and some are even facing poverty.
In this article, we’ll explore how long the crisis is predicted to last for, and if there is any hope on the horizon.
Why is there a cost of living crisis?
There are a few reasons for the current cost of living crisis, and it’s all come together to create a ‘perfect storm’ where prices are rising but wages are not keeping up.
●The COVID-19 pandemic: The pandemic set the wheels in motion for a recession. Throughout lockdowns, there were job cuts and business closures across Europe (particularly in the hospitality and travel industry), which has had negative effects on the economy as a whole.
●The war in Ukraine: Russia invaded Ukraine in February 2022, and since then many countries across Europe have imposed sanctions on the former. This has caused economic difficulties, as many European countries previously imported their oil and gas from Russia, and are now having to use more expensive means to extract these resources.
●Brexit: This one’s tailored to the UK, but the country leaving the European Union has had an effect on the cost of living, as importing foreign goods is now more complicated and expensive.
●Inflation: Inflation is high across the continent, which means that prices are rising much quicker than wages are going up.
When will the cost of living crisis end?
Sources say that the cost of living crisis should improve a little in 2024 – but this may mean that prices stop going up as quickly as they have been.
The ratio of cost of living to wages will probably not fully catch up until 2027, so we still have a few years of tightening our purse strings yet.
Will prices come down?
Prices are unlikely to ever come down. Prices have been going up (inflating) since money was invented; that’s why the older generation can remember buying houses for a fraction of what they cost now.
It’s very rare for the economy to deflate (which is when prices go down), and if it does, it’ll probably be by an unnoticeable fraction.
But theoretically, wages should go up, and economists predict that they will; we just might have a few more years of imbalance before that happens.
Long-lasting impacts of the cost of living crisis
For some, the cost of living crisis has plunged them into debt that they’ll take a long time to get out of.
Some people have taken out large loans or maxed out multiple credit cards, so along with affording to live in an increasingly-expensive Europe, they’re also having to pay back debt each month.
Others have turned to activities like gambling to try to make some quick money. Casino no deposit bonus schemes mean that gamblers can try out a casino for free, but often they become hooked (especially if they have some early wins). This can create a vicious cycle.
Tips for dealing with the cost of living crisis
Here are some tips to follow during the cost of living crisis.
●Live within your means: Try to cut back on any unnecessary expenses or swap them for budget-friendly alternatives. For example, instead of going out for dinner with friends, you could invite them over and cook and split the cost of groceries.
●Make some extra money: There are numerous survey apps and User Testing sites that want to hear from people like you and are prepared to pay for your time.
●Ask your boss about your salary: It never hurts to ask! You could have an open conversation with your boss about your salary, whether there’s any scope for a raise and if not, when you could expect one.
●Consider upskilling: This is a long-term solution, but you could consider taking a course or gaining an extra skill which could make you eligible for a promotion or another position in your industry.
●Go through your standing orders and bills: Is there anything you could cut back on? Take a look at your household bill providers and any direct debits that you’ve forgotten about and see if you can switch or cancel any.
●Try to not be tempted by credit cards or gambling: You should only use credit cards if you can pay them off in full each month, and you should only gamble money that you can afford to lose. If you’re in financial difficulties, try not to turn to either.
The cost of living crisis has impacted people all over Europe, but it won’t be at the forefront of society forever; it’s likely to start to abate next year. Until then, there are a few things that we can do to remain financially solvent, so today’s a great day to take stock of your finances and see where you are with them!