What you really need to know to help you out financially during this pandemic
With coronavirus lockdown putting plans on hiatus, destroying the economy and causing job uncertainty across the country, you are not alone if you suddenly find yourself in an unstable situation when it comes to your finances.
There are many of us on the same boat, wondering where to start in arranging our budgets to accommodate these uncertain times. And if you don't have an emergency fund (experts say its income should be about three to six months), don't panic because we're talking to Barclays Director of Savings Clare Francis who’ll help ease your financial stress.
So whether you're in a flatshare or family trying to balance books, these tips can help you stop any sleepless night.
1. Ask for help as early as possible
It is important to remember that support is available. The government has announced several measures to help people who may have lost their jobs or self-employed people who have seen work dry up. If you are experiencing financial difficulties or think you may be in financial difficulty, it is important to speak to your bank as early as possible.
If you are self-employed, self-isolating or caring for a sick child and do not get any benefits, then you can get a job and subsidy or Support Allowance.
2. Making mortgage and rent payments
Contact your bank before losing any payments for things like mortgages, loans, and credit cards, as this can affect your credit score and limit your options in the future.
The government announced on March 17 that all mortgage providers should offer a three-month payment holiday to anyone affected by a coronavirus. These range from mortgage payments holidays through to freezing interest rates. Barclays, along with other financial institutions, introduced new measures to help people during this difficult time.
If you are concerned about rent: The government has introduced emergency legislation to protect you from eviction if it cannot keep up with payments; The new rules mean that they cannot fire you for at least three months.
3. Tackling credit cards and other debts
Companies have implemented measures to help those suffering from the pandemic. If you have debts, such as credit cards and loans, contact your providers and explain that you are having difficulty making payments. The Financial Conduct Authority has suspended ongoing debt rules on your credit card. This means that service providers cannot cancel your card until at least October. This will give some relief to those who depend on credit to cover their daily living costs.
Coping with an overdraft: Talk to your bank to find out what it can do for you. Barclays, for example, waived one months’ interest on overdrafts for customers.
4. Accessing fixed savings
There is usually a penalty for withdrawing money before the specified period ends, but many institutions are now dropping this charge. Just withdraw your savings as a last resort.
5. Now’s the time to reboot your budget
If you are facing a reduction in income or worrying about job security, take a look at where your money is going and see if there is any way to cut it to try to make things a little easier.
Take a closer look at all your expenses and cut down on any unnecessary expenses. One idea is to save any money you save on limited trips, meals, and other events in the emergency fund.
If there is good news, the fact that we cannot get out should mean that we are spending less, and therefore we have very little money to provide. This is an ideal opportunity to press the reset button and think about lifestyle changes that you can sustain once things return to normal.
6. Search around for the best deals
Take advantage of this time to see where you can save it. When was the last time you changed your power supply, for example? It is worth checking your home bills to see if you can save money by switching to a cheaper bid. Even if you're dealing with work and childcare, it may be worth your time, as you'll likely find that you can save hundreds of pounds a year.
7. Avoid the temptation to splurge online
It's easy to get bored and start buying things you really don't need. Who else has an inbox and social media stuffed with tempting offers, but Barclays research reveals that we sacrifice nearly £ 400 a year of potential savings by spending on the items we see on social media.
8. Stay home and save
Planning your meals while closing can have a number of benefits: not only means less spending but if we only go to buy essentials, it is also an opportunity to use what you already have at home.
Also Read: India seen spending more on economy after extending lockdown