The current situation across the country is undesirable and shows no signs of improving any time soon. One of the significant challenges of dealing with the pandemic has been people managing their finances. Businesses have been forced to close, contracts cancelled, and salaries cut or stopped. It is a wonder how people are managing during these unprecedented times.
People have no other option but to manage their finances as best they can and try to get some additional cash to see them through the situation. What follows are some suggestions for surviving the economic turmoil the pandemic has thrown at us.
6 Tips For Managing Your Finances in a Pandemic
1. Match Your Expenses to Your Needs
Wherever possible, cut back on your expenses, and make them more focused on your needs rather than your desires. The adage of “look after the pennies, and the pounds will take care of themselves” applies as much now as it ever has done. It’s often the smaller expenses that we overlook that do the most long-term damage.
Assess things like gym memberships, eating out, and online subscriptions. Get the most out of the food you buy, and get creative about concocting new recipes from the contents of your fridge.
2. Build Up An Emergency Fund
Having adequate liquidity to survive around three to six months of a pandemic is critical. This emergency cash should be sufficient to sustain you in living expenses should no other income be available. When assessing the amount you’ll need, think about food, utilities, medical expenses, regular bills, childcare, and so on.
If you don’t have this amount of cash in hand, start accumulating it and get creative about how you can get it. Cutting back on your expenses is one way to save for this fund. Go through each line of your budget and find ways to reduce your spending. Check receipts and bills to see if there are cheaper alternatives out there. This pandemic has shown us that having an emergency fund is no longer a luxury but a necessity. Start acting now to establish one.
3. Beware Of Fraud and Con Artists
Everyone is feeling the pandemic’s economic effects, and some will stop at nothing to turn things to their advantage. There is a wave of online scams and spoof emails doing the rounds at the moment.
Confidence tricksters and scammers are trying to cash in on people’s desperation and vulnerabilities. Be on your guard for such tricks. Remember, if something looks too good to be true, it probably is and is likely to be a scam.
4. Manage Your Debt
If you are struggling to meet repayment deadlines, call your lenders and creditors to determine if you can have a payment freeze or a reduction in your payment plan. These are two viable options, so do not be put off by asking for either of them. Rest assured, you will not be the only person in this situation.
Your creditors will not be surprised by your call, as financial hardship is all too common during this pandemic. You are likely to be offered an amended repayment plan in line with your previous repayment record, allowing you to make some savings through deferred payments or forbearance.
Your insurance premiums are one thing that you cannot defer. Perhaps the best option here is to look for cheaper insurance cover. For instance, you may be using your car less, or not at all, so you might not need the cover you had previously.
5. Avoid Using Payday Loans
With payday loans, you may get access to money quickly. However, the interest rates are incredibly high, and in many cases, unaffordable. You should avoid payday loans, even if you are in financial hardship already. These loans may seem like a good idea, but they only serve to pile more debt onto you and at a higher interest rate.
6. Ask For Unused Service Refunds
If the lockdown has meant you’re unable to use certain products or services that you’d already purchased, For instance, you may have an annual gym membership that you can’t use. Or, you possibly made a prepaid reservation at a restaurant. You are entitled to a refund on these services. So you should reclaim your money. If you get refused, you have the right to make a complaint via the Competition and Markets Authority.
Where To Get Help
There are plenty of organisations and agencies that can provide help and assistance during these challenging times:
- AdviceUK is a debt advising organisation for individuals with disabilities and minority communities.
- Business Debtline provides debt advice to small businesses (0800 197 6026).
- Citizens Advice provides information on debt and general finances (0808 223 1133).
- Financial Ombudsman Service to resolve disputes related to loans (0300 123 9123).
- Money Advice Service offers general advice in money matters (1800 138 7777).
- National Debtline provides information on all debt matters (0808 808 4000).
- StepChange Debt Charity for debt advice (0800 138 1111).
These organisations are available if you are struggling with your debt or have already fallen behind on payments. They will help get you back on track towards managing your household bills, credit card loans, and other debt.
COVID-19 has presented us with a new set of challenges. Dealing with the pandemic has required drastic and immediate action, which has led to considerable financial stress and hardship for thousands of businesses and millions of people.
Seldom has there been a time when it has been more critical to manage your money carefully. Hopefully, these six tips for managing your finances during the pandemic will help you get through these challenging times safely and financially sound.