Inflation is still falling - but consumers still have to find more money to pay the bills this month than a year ago.
The latest headline inflation figure is 3.4% for February - down from 3.6% in January and is the lowest rate since November 2010.
Although the falling rate gives the economy a feel-good factor, households still have to find around £45 extra a month to maintain the same level of spending as 12 months ago.
That means something has to give for consumers on a fixed wage who were struggling with their finances some months back.
Falling inflation does not mean anyone will have more money in their pocket - just that the rate of making up for extra spending on basics has slowed down.
Inflation at 3.4% means finding an extra £3.40 every month.
Households with problems paying their debts now and who are unlikely to see any significant increase in income over the coming month will gradually find themselves worse off.
The best way of coping with a squeeze on finances is to look at spending and to see what can be cut.
That means putting together a monthly budget that exposes the true amount of spending and then identifying waste.
• Direct debits going out for satellite TV, mobile phones, unused club memberships and other little luxuries are good places to start cost-cutting.
• Switch to Freesat or Freeview for TV - boxes plug in to existing aerials and dishes and the spending can be recouped relatively quickly
• Pay-as-you-go on the phone is cheaper than monthly contracts
Scrutinise all those few pounds here and there for extras like club memberships, bank insurances and other outgoings
The aim is to switch from contracts to pay-as-you-go where possible. This gives the consumer control over spending and does not ‘park’ cash in someone else’s bank account when it could be saved to pay a bill.
Many households can quickly free up around £100 from this simple exercise.
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