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Various organisations have predicted that the cost of living will increase in 2017, with household budgets becoming strained due to the fall in the pound and rising inflation. The price of rail fares has already seen an increase, making it all the more important for people to set strict budgets, and stick to them.
We've already seen that simply monitoring your spending can go a long way to helping people budget better. But with rail fares up by an average of 2.3% as at 2 January, it can be difficult to figure out if your budget will be enough to cover the rising prices. Luckily, an average is just an average, and National Rail have reported that while some prices will have to go up, others will stay the same and some prices may even be reduced, so check your local journey planner to see what's in store for you.
That said, around 40% of rail fares are regulated, including season tickets on most commuter journeys, some off-peak return tickets on long distance journeys and anytime tickets around major cities. For these fares, the Government uses July's Retail Prices Index measure of inflation to determine the increase in price, rather than leaving it up to the rail companies.
What's more, the average price paid for a single journey, which is currently around £5.46, has decreased from what it was 10 years ago, and the average price paid per journey on a season ticket has fallen in real terms by 12.8% since 1999-2000. So, while you may need to put a question mark next to future fare prices in your budget, this may not end up stretching it too much, especially as the Rail Delivery Group has announced that it will be overhauling the fares system, which could make cross-country fares not only simpler but also potentially much cheaper.
That doesn't mean that there aren't plenty of other increasing expenses that require some monitoring, however. If you note down how much you pay for groceries and fuel each week, you might start to see a rise in spending over the next few months, despite not changing your spending habits.
To prepare for this, and any other eventualities, you may want to start an emergency fund – especially as savings rates have seen a small rise recently – so that you will have some funds to fall back on should your budget become strained in the near future. An easy access account would be ideal for this, but if you want a better rate of interest, a notice account with a reasonable notice period (some offer a notice period of as little as 30 days) could also suffice. And don't forget to book train tickets well in advance, if possible, as that should also decrease their cost.
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