COVID-19: Create an emergency coronavirus budget
Due to the unprecedented circumstances of the coronavirus outbreak, families across the UK are facing redundancy, furlough and the biggest public health crisis of modern times. For many, their income – and outgoings – will have been turned upside down in just a few short weeks.
The situation continues to develop. In the past two weeks, almost one million of us have applied for Universal Credit, the government has announced new measures to provide for the self-employed, and COVID-19 cases are still on the rise.
While no-one can predict exactly what will happen next, you may be wondering what action you can take to mitigate the impact on your finances and budget for the months ahead. The good news is, there are plenty of ways to reduce your outgoings, make the most of what you have and save for the future.Get free advice
Step 1: Check your standing orders and Direct Debits
Time for a quick situation summary. Log into your online banking, dig out your credit card statements and check your Direct Debits and standing orders. Make a note of all your key monthly outgoings, and where your money is going, including:
- Mortgage, rent and council tax payments
- Home and car insurance
- Car finance and fuel costs
- Credit card bill and debt payments
Earmark the essentials, and make a note of anything you might be able to get assistance with or cut back on during lockdown. If you’re struggling for cash, now’s the time to eliminate all but the most critical household outgoings.
Prioritise paying your mortgage or rent, council tax, debts, heating, and electricity. A quick refresh of your monthly standing orders and subscriptions should be enough to identify any dead wood.
Step 2: Identify the savings you’re making already
The coronavirus epidemic means that a lot has changed about our lives in just a few short weeks – including our social habits and spending. Here are just a few things you might make significant savings on in the coming months:
- Childcare costs – If you’re working from home.
- Commuting or fuel costs – Whether it’s a monthly train ticket or savings on fuel spend.
- Food shopping – Instead of picking up the odd ingredient on your way home from work, it’s far more likely the food shop has become a weekly occurrence and you’re spending less overall.
- Beauty, maintenance and clothing – Visits to the barber and getting dressed up are obsolete during a lockdown.
- Eating out and entertainment – Money from birthday dinners and big days out with the kids all adds up.
- Subscriptions – If you haven’t already, you might be surprised at how you’ll save from cancelling that gym membership or cinema card. Given the present circumstances, there are plenty of outgoings you might not even miss.
Remember: although times are tough, the opportunity to save money and cut back is at an all-time high. Take advantage, and channel that money into bills or emergency funds instead.Get free advice
Step 3: Lockdown: time to shop around
When was the last time you reviewed your energy provider or your digital TV subscription?
While you may classify some outgoings as essentials, there are plenty of ways you can still save some money by shopping around for better rates – whether that’s switching up your home broadband provider or reducing your mobile phone data level.
Many businesses will also be trying to retain you as a customer during this difficult time, so it’s worth getting in touch to find out if they’d be willing to renegotiate your monthly payments.
Step 4: Don’t be tempted to spend by short-term solutions
Due to the ongoing COVID-19 outbreak, rates are at an all-time low, retailers are slashing prices – and you might be thinking about taking advantage of the 0% credit card offers, interest-free payment plans or extended overdrafts that are currently available.
However attractive it might be to get a quick cash fix, or let loose with a little spending, it’s important to weigh up the future impact that unnecessary outlays could have on your finances. And it’s wise to be wary of the many payment holidays being offered on credit cards and loans. These are, by their very nature, temporary, and interest still applies during the holiday period.
One day, things will go back to business as usual, and you want to make sure you’re financially stable when that happens. Why not embrace this opportunity to have a holiday from consumerism, instead?
Step 5: Seek out the free stuff
Creating a budget doesn’t mean you have to miss out on doing what you love! From video-calling your friends and family to curling up with an eBook from your local library, some of the best things in life really do come for free.
Many businesses are giving customers the opportunity to enjoy free trials of their services and apps online during lockdown, so whether you want to get in shape from the comfort of your living room, learn a new language or finally check out those guitar lessons on YouTube, you can find something positive to take your mind off money matters – even for a little while.
We understand that facing up to your finances can be daunting, but there’s no time like the present to take control. When it comes to dealing with your debt, we can help make it happen. Speak to one of our expert advisors on 0808 253 3282 to find out more.