The COVID-19 pandemic has upended the financial lives of millions of people, and the ripple effect will last for many months to come.
However, as the country slowly start to reopen, now is the time to prepare your personal finances for a post-coronavirus world. While the future remains uncertain, being proactive with your money means that you and your family will be better prepared for whatever it brings.
Here’s our top 5 tips for getting your personal finances back on track.
1. Reassess your budget
During the pandemic, your budget is likely to have changed dramatically. Many people will have spent more on groceries and utilities while saving on petrol, travel and socialising. But as economies reopen, it’s time to reassess your budget based on your specific circumstances going forward.
Will you work from home permanently or go back into the office part time? Do you have a scheduled end to furlough? How will you handle childcare? With your lifestyle changing, you need to look carefully at your budget to ensure you don’t slip into debt.
2. Plan for deferred payments to restart
If you opted to defer your mortgage or loan repayments to help you manage during the pandemic, they are likely to be restarting soon. Review the deferment terms so you know exactly when payments will restart and how much you will owe so you can factor this into your budget.
If you think you’re going to struggle with a sudden increase in payments, the Money Advice Service and Citizens Advice Bureau will give you free advice on the best action to take for your personal circumstances – but remember that services may be busy as they try to manage higher demand than usual with fewer staff.
3. Know what help is still on offer
Keep up to date on what the Government is offering to help people affected by coronavirus to manage financially. The Consumer Council has the latest advice on sick pay, mortgages, benefits and what banks are doing to help consumers. Keep in touch with your employer to find out what it’s doing to help you back to work and what your pay checks are likely to look like in the weeks and months ahead.
If redundancy could be on the cards, as it unfortunately will be for many, don’t bury your head in the sand. Consider how you would cope financially should this happen and what your options for future employment are.
4. Consider extra income
If your personal finances took a hit during lockdown, having some extra income could help you get back on track. In the short-term there are a few ways to do this and, who knows, making money from something you’re passionate about could lead to a whole new lease of life beyond Coronavirus.
If you have a skill to offer, now’s the time to sell it online. Make the most of websites for freelancers in your field, such as copywriting, marketing, public relations or graphic design. People Per Hour, Fiverr and Upwork are good platforms to create a seller profile and showcase your services. While many industries are experiencing a downturn, some – such as private tutoring, online fitness and food and drink companies – are in higher demand, which could create new opportunities for you.
5. Rebuild your savings
If you had to dip into your savings to get through lockdown, it’s important to start building these up again so you are prepared in case you need to use them again. Even if it’s just a few pounds here and there it will help you to re-establish a savings habit. When you’ve gained financial stability again, you’ll find it easier to increase the amount rather than be starting again from scratch.