The COVID-19 pandemic has presented many people with money concerns they would not have otherwise had. Dealing with the pandemic has been a challenge for people at all levels of society. There is some good news: there are plenty of things you can do to take the pressure off your bank account.
This article covers five financial concerns that have become common during the COVID-19 pandemic and how you can overcome them.
1. Lack of Job Security
The economy has taken a massive hit as a result of the virus. Many companies have been forced to lay staff off. Of course, the fear of losing your job and an uncertain financial future is a considerable worry to have. Here are some tips to help you cope with this concern:
- Conduct an assessment of your finances. Set out your income alongside your expenses to get a clear picture of your overall financial position.
- Go through your expenses and decide whether each one is essential or find a cheaper alternative? For instance, you could cut the interest payments or temporarily remove them by doing a balance transfer to a new credit card.
- Start saving as early as possible. If you have job security concerns, start putting some of your monthly salaries away to help cover you should the worst happen.
- Dig out your CV and update it, then send it out to some recruiting agencies.
- If you have skills or knowledge that you could use in a side hustle, start setting one up.
- Try to get some clarity about your long-term job security. Your employer may not be able to give you a definite answer, but you might get enough information to help you feel more in control.
2. Recently Made Redundant
If you are in the unfortunate position of having been made redundant, you should not panic. Here are some measures you can take to regain some control:
- Contact your mortgage lender and other creditors, letting them know about your situation. They should be able to help you by setting up affordable repayment plans.
- Find out what benefits you can claim. You can go to Citizens Advice, and they will talk you through what is. Alternatively, you can do some research on the gov.uk website. One benefit you may be able to claim is Jobseeker’s Allowance.
- Avoid taking on any other loans, as this will increase your financial strain.
- Start looking for work. Use your network, consult recruitment agencies, and check out your local job market.
- Consider selling some old or unused items you have to get a bit of extra cash.
Losing your job can be a traumatic experience and often lead to anxiety or depression. If you have any such feelings, you can reach out to friends or family for support. The Samaritans can also provide limited support and advice on mental health issues.
3. Insufficient Money To Pay Bills
Finding the money to pay bills can prove to be a challenge, whether you have a job or not. If you are struggling to pay your bills, there are several things you can do to get back on track:
- Once again, be open with your creditors, and let them know about your situation. Set a realistic target for what level of repayments you can make, and stick to those amounts.
- If you apply before 31 October 2020, you could qualify for a payment holiday due to the coronavirus pandemic. Your creditors will be able to advise you on whether a payment holiday is available.
- If you are a homeowner with a mortgage, you could support your mortgage interest payments. This support consists of a loan to cover your mortgage interest for a set period.
- If you have several debts, you can consolidate them under a single loan. It may not fit your situation, but it can often make paying several debts more comfortable to manage.
Regardless of your situation, failing to pay your debts can harm your credit score. So, contact your creditors and inform them about your situation.
4. Costs of Isolation
The costs of going into isolation are often exaggerated, and there are ways to help you meet these costs. Here are some ways to help you take the sting out of the costs of isolation:
- When you are instructed to Test and Trace by the NHS, you may be entitled to a £500 grant.
- For employees, you should also qualify for Statutory Sick Pay when in isolation.
- Universal Credits are available for the self-employed or low-income earners.
- For those that do not qualify for Statutory Sick Pay, there is the possibility of getting Employment and Support Allowance.
5. Cost of a Subsequent Shutdown
If you have concerns about your ability to survive a subsequent shutdown, and you are a tier 2 or 3 business, here are some steps you can take to help keep going:
- Make improvements to your cash flow by pursuing debtors and overdue payments.
- Apply for a Business Interruption Loan or a Bounce Back Loan.
- If you are struggling to pay your tax, approach HMRC to set up Time to Pay.
- Apply for a SEISS grant.
If the worst happens and you are forced to close, you can apply for the Job Support Scheme. This scheme is available from 1st December 2020.
The COVID-19 pandemic has placed additional financial stress and concerns on many people and businesses. Hopefully, adopting some of the measures in this article will help you during a difficult time.