How to Look After Your Finances During Lockdown
There’s no doubt that this year has put a financial strain on most of us. Many businesses and families are struggling to make ends meet with lockdowns and restrictions on what work we can do and fitting this around childcare and looking after vulnerable family members.
During these uncertain times, it’s even more important to look after your finances as you never know what’s coming next. In this article, we’ll look at ways that you can look after your finances during lockdown:
1. Check your incomings and outgoings
This is always the first thing to do when becoming financially savvy. You need to know how much money you have coming in and what you’re spending. Write down what you expect your incomings to be, including things like child benefit as well as your earnings from work. If you are self-employed, it can be hard to predict what you will be making but try to make a realistic minimum prediction.
Write down all the things that you have to pay for each month like bills and subscriptions and what you normally spend on your food shopping and other essentials. See if there’s anything that can be changed – maybe there’s a cheaper option for car insurance or energy providers, for example.
2. Give yourself a budget goal
For other spending, give yourself a goal. I like to set myself a goal (or limit, really!) for what I can spend on other things like clothes and books each month to keep me on track. Whenever I purchase something, I write it down on a list on my phone and when I reach the limit, I’m not allowed to buy anything extra until next month. This makes me think about each purchase more carefully and makes me spend less money.
It’s a good idea to have a budget for different areas of your spending – set yourself a budget for your food shopping too and see if there’s anything you could change there to spend less. Cooking from scratch (in bulk too) and shopping in more affordable supermarkets are great ways to make your food shop cheaper.
You can read more about how to make a budget on the Which? website.
3. Find out what you’re entitled too
There’s lots of financial help available for people during this pandemic so do find out what you and your family are entitled to that can help you through this difficult time. You can apply for a mortgage holiday, for example. Furlough has been extended too and there are grants available for self-employed people who have been affected by the pandemic too. If you’re working from home when you would normally be in an office, you can claim tax relief for your increased electricity and heating costs. If you have been affected, find out what help you are eligible for.
If you have any flights/holidays or events booked, check if you’re owed any money for cancelletions too.
4. Loan options
Saving and being careful with your money is always the best option but it’s not always possible. We can’t predict life and surprise expenses that need to be covered. If you don’t have a savings pot at the moment, you can take out a loan to help you out. Payday loans often get a bad reputation due to high interest costs, but they can be a good way to get financial help quickly. They’re also a good option if you need loans for bad credit and the interest can actually be less than what it would cost to use your overdraft.
Always do your research before taking out a loan to make sure it’s right for you and pay it back as soon as you get your next paycheck. Adjust your budget the following month accordingly.
5. Plan ahead
Try to put aside some money each month for the future and for emergencies. Plan ahead for how you’ll be able to afford certain things like Christmas for example. The silver lining this year is that Christmas should be a more affordable event when we most likely will only be celebrating with our immediate family. Make the most of a low key Christmas, shop carefully and plan your meals for the festive season.
This year has been crazy and affected us all in many ways. It’s important that we do what we can to look after ourselves, our families and our finances. Hopefully, the world will be a better place again soon.