The past year has been difficult, with the repercussions still unfolding. If you're worried about your finances going forward, here's a few things you can do to protect them.
1. Reduce your debts
The best thing to do is try to pay off some of your debts. Making more than the minimum payment each month to your credit card bills means your debts should reduce a lot quicker. You’ll save on interest too. Using a card repayment calculator can help you predict how long it’ll take to pay off current debts. It’ll also tell you how much time and money you could save by increasing payments.
2. Makeover your outgoings
Make a list of your monthly outgoings. Include everything. Work out which ones aren't essential and consider how much you’d save by cutting them out. You can write them down, or make a spreadsheet. You could also use the Money Advice Service’s budget planner to help with this. This will show you what your real disposable income is and highlight where can make cut backs.
3. Reduce your costs
You’ll have regular and essential payments that you simply can’t cut out. However, you might be able to reduce some of them. If your broadband or mobile is coming up for renewal, start looking to see if you can find them cheaper elsewhere. Do the same with your energy bills. There are services out there to help you save money by switching providers. Make sure you won’t be subject to any cancellation clauses first.
4. Start saving
Now is probably the best time to start putting some money aside if you can. No matter how small it may seem. Review your monthly expenditure and see what it is you’ve got left and deposit some of this into a savings account. Knowing you’ve some extra cash set aside will give you peace of mind. If your financial situation was to worsen, you’d have a buffer to help you through. Aim to save enough money to cover a few months of mortgage or rent payments if you can.
5. Shop wisely
Being in lockdown has meant we’ve turned to the internet for online shopping more than ever. Before you make any online purchases, be sure you're only buying what you need. Avoid shopping out of boredom or to boost your mood. And try not to succumb to the clever marketing ploys that land in your inbox. If it’s hard to resist temptation you should unsubscribe from those emails.
6. Cut down on takeaways
Takeaway has been the weekly highlight for a lot of us during lockdown. Some delivery services have even had to employ more staff to meet the demand. We’re not suggesting that you deny yourself every treat during this time. However, cutting back could help you save you some cash.
7. Avoid financial risk-taking
As much as we all need something to look forward to, try to resist long-term planning when it comes to spending money. While the immediate future is still uncertain, try not to take any unnecessary financial risks. For example, booking a holiday. It could turn out to be a bad decision if restrictions are still in place when you come to travel, or if your financial situation changes in the meantime.
8. Keep on top of your payments
Are you having difficulty making payments to cards or loans? If so, contact your lender and see how they can help you. Don’t ignore it. They might be able to give you a payment holiday or reduce your payments for a fixed term.
9. See if you’re entitled to financial help
COVID-19 has placed many people under financial strain. There are schemes available that might help you. If you’re now working from home, you can claim tax relief on items you need to buy. If you have children you might be entitled to help with childcare costs. Check the government's website to read more and see if you could receive extra help.
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