The UK is in the midst of a pandemic, and it’s a situation that the vast majority of us will never have witnessed before. Therefore, it is likely to be a scary and tense time for a lot of families. Money, of course, is going to be more important than ever during any and all lockdown procedures and planning put in place. But how can you easily manage your money during the coronavirus? How is COVID-19 likely to affect your money in the long run?
This will, of course, largely depend on the work you do, and whether or not the government is supporting you. As there is no clear indication as to where the crisis will end at this early stage, it remains to be said that we all need to start thinking a little more carefully about how we use our money and where we are investing it.
Here are a few tips on how to manage your money during the coronavirus crisis, and how you can make your finances work for you in the uncertain few weeks ahead. Most importantly of all, of course, is not to panic – we are all in this together, and there are ways and means in which you can better support yourself in times of such uncertainty.
The best way to boost your income or to invest in emergency supplies is, of course, to draw on emergency savings. If you have any form of savings available, these will be extremely important to you in the here and now. If there was ever an emergency that you needed to save up for, COVID-19 is likely to present a very good case.
However, not everyone has emergency savings in place. Therefore, it is always worth discussing options with your banks. At the time of writing, banks are still classed as key services, which means that you will still be able to approach banking staff online and over the phone for advice.
Once again, it’s important to keep in mind that banks will understand everyone is being affected in the same ways. Therefore, it is also worth keeping an open mind – banks will likely have long waiting times for you to call, meaning you may have to persist.
Get a Budget
Budgeting during this time is crucial. If you don’t already have a weekly or monthly plan set up, you must start thinking about how much you spend regularly. What do you need for necessary supplies and services? How much can you afford given your current economic situation?
As well as budgeting for everyday needs, you also need to think carefully about emergency or COVID19 investments. Is it worth trying to grow your own food? Have you got enough medical and hygienic supplies in place? When budgeting, do remember that panic buying harms the vulnerable. Always only stock up what you absolutely need. If recent panic buying over toilet rolls and hand sanitiser is anything to go by, there are still plenty of people who need to think carefully about what’s actually necessary.
Do make sure to double check advice from online services and charities when it comes to emergency budgeting. Writing a budget doesn’t have to be an ordeal, but you must make sure you have a clear plan of action in place.
Cancel Unnecessary Spending
Think carefully about what you’re really going to need to spend money on. During isolation, you will likely need to keep yourself entertained. However, only make sure you keep a minimum of TV services available. Do you really need the Sky Sports package now everything has pretty much shut down?
You should also think about looking into any other unnecessary subscriptions you’re simply not going to use. What about cinema cards? Think about any loyalty clubs or services you might already be registered to. Are you really likely to use them during lockdown?
Talk to Your Lenders
If you are paying money to various lenders, be ready and willing to talk to them. Given the extraordinary situation, they will be more than happy to offer finance advice during coronavirus preparations. Many lenders are waiving specific fees and are lowering the rates that people are paying month on month. While there is no guarantee from case to case that you will receive respite, do make sure to get in touch with your lenders to see if they can help to reduce the strain on your finances.
Recently, as the threat of coronavirus has increased, many mortgage lenders and services have started offering holidays on payments that their creditors would usually be making. This has been agreed with the Chancellor of the Exchequer, and as such, it is completely legal support which you can look for immediately.
Mortgage holidays are available from a variety of lenders and bodies right now, however, do be aware that you will likely need to pay back the amount you relieve from at a later date. This could, for example, mean that you result in extending your mortgage term. Given current circumstances, however, this is likely to be a large relief in the short term. Set your expectations and make sure to call your mortgage provider as soon as you possibly can.
Avoid Cashing In Investments
Lastly, you may find it tempting to cash in your investments – don’t! This may actually result in you paying more in the long run, particularly in the case of cashing out pensions. Avoid paying exorbitant fees just to relieve a small amount of cash. The fact is, coronavirus is still likely to be a short-term problem. If you end up selling off all your investments and assets in this time, you could end up in a much stickier situation later on in time. Think carefully and remember there’s no loss until you actually sell. Any loss you are seeing at the moment is unrealised loss. Which only becomes an actual loss if you sell. History teaches us that in the long run, the stock market always recovers.
One of the best things you can do right now – and it might be hard – is to not panic. Everyone is going through the same emotions – however, the COVID-19 crisis will pass in the long term. The best thing you can do right now is, of course, stay safe, check in on vulnerable family members and friends via phone, and make sure you have a financial plan of action in place.