Getting your finances back on track

Lockdown has been tough and thrown many challenges our way. If you’ve been struggling with your finances over the last few months, then you are not alone. Millions of people have seen a change in their circumstances due to the coronavirus pandemic, whether that’s a change in income, reduced working hours or they’ve been furloughed.

With less money available to manage repayments, many people have asked lenders for a payment holiday on things like mortgages and personal loans. Payment holidays can offer a short-term break from monthly repayments but it’s important to remember that interest is still charged during this period. This means the total amount of debt which you need to repay will increase and is usually added on to the total amount payable.

Unfortunately, for some, the pandemic has pushed them into a difficult financial position. If you’re in that situation, or finding it difficult to manage your money, what can you do?

We’ve teamed up with financial coach Catherine Morgan from The Money Panel to create a podcast with our Consumer Managing Director, Paul Went, featuring lots of useful guidance and tips on recovering financially from lockdown. You can find the podcast here and you’ll also find lots more information on our MoneySure page.

But here are a few pointers that could help you start to tackle your money worries.

• You are not alone – If you’re worrying about money, then it’s really important to talk to someone, whether it’s your partner or family, a close friend, or a professional such as debt counsellor. Being able to talk about your money problems will help put them into perspective and figure out the best way to tackle them.
• Assess your income and outgoings – On a piece of paper, write down how much income you get every month and then add-up how much you’re spending over the same period. It’s important to include everything, from the odd take away coffee to your regular bills like rent or mortgage payments. If you are spending more than you earn, look at where you can cut back on your expenditure – like those takeaways or subscriptions you don’t need – to save money. Our MoneySure page features links to some great budgeting tools to help you get started.
  
  
• Talk to your lender – It’s important to let your lender know your situation. Don’t miss a payment or ignore the problem, it’s better to contact your provider and work out which solution works best for you and your situation.
  
  
• Get professional help – Sometimes your money problems can seem overwhelming. Before that happens, talk to one of the many organisations and charities than can offer you advice on what to do and even what benefits or other support might be available to you. There’s a full list in the useful contacts section of our MoneySure page, including organisations like Step Change and National Debt Line.

We hope these tips will be useful to help people manage their finances better, whether the country is in the middle of a pandemic or not. In fact the lockdown could actually be good opportunity for many of us to get into better habits with our money, especially if you’re already saving on costs such as the daily commute, or have reigned in your spending on restaurants and going out.

Here’s a few suggestions, but there are even more moneysaving tips on the MoneySure page.

• Plan ahead – Creating a weekly meal plan is not only a good way of ensuring you have a healthy diet, it can also help you save money. By knowing exactly what you need to buy and adding your ingredients to your shopping list, you are less likely to overspend in supermarket, especially if you do your shopping online. It’ll also probably stop you being tempted by a mid-week takeaway when you’re not sure what to cook.
  
  
• Shop around – When it comes to renewing things like your car or home insurance, or perhaps reviewing your utilities like gas, electric and mobile phone, you should always shop around. Automatic renewals can be more expensive because you are no longer a new customer, so check out comparison sites to see if you can save some money with a different provider. You might even be able to go back to your existing provider to negotiate a better deal.
  
  
• Make sure you’re not paying for what you don’t need – Although many people have used TV streaming services more often during lockdown, the cost can add up – and do you really need two services? Check if you’re really using them and cancel or pause them if you’re not. Also check you’re not paying twice for something like music streaming, which sometimes comes bundled in with other entertainment services.
  
  
• Sell what you don’t need – There’s a growing trend for people to sell their pre-loved items, from clothes to books and DVDs, on the plethora of online auction sites and local classified ad websites. Everyone knows eBay, but there are sites like Depop for clothes or Gumtree for local sales. Just make sure you are aware of the listing costs and any shipping fees before you post your items at too much of a bargain price. If you’ve got into making your own arts and crafts during lockdown, you might want to try and sell your creations through a site like Etsy to earn a bit of extra cash.

Sadly, it looks like the coronavirus and some form of lockdown will be with us for some time. Even then, when the virus does dampen down, the idea of getting back to normal will be very different as the country recovers from the economic impact of COVID.

So, whether you’re currently struggling financially or not, now is a good time to review your finances and take control of your money.