Rachel Blackamore, NatWest Managing Director of Personal Banking, London and the South East, gives practical tips on how to look after your personal finances during the coronavirus pandemic:
“These are uncertain times, and many people may be worried about being impacted financially as this global crisis continues. By implementing these small measures, people can take the first steps to become more financially secure in the coming weeks”.
1) Review your expected incomings and outgoings
At the difficult time we are in, it’s important to be clear about what your financial position is. Check what you’re expecting to come in over the next few months, and make a list of your outgoings, including food, housing costs and any essential bills. Most banking apps will have a spend analysis feature which makes it quick and easy to see what you are spending your money on. Use the time spent indoors to review your direct debits and recurring payments to see if there are any services that you haven’t been using for a while or forgotten about and cancel them.
If you’re self-employed and worried about how this might impact your incomings, the Government’s Self-Employed Income Support Scheme will offer a taxable grant of up to 80 per cent of a self-employed person’s income based on their average monthly profits for the last three years up to £2,500 per month. The Gov.UK website has more information.
2) Check what you might be owed
Some events that you might have been planning to attend in the coming months might be cancelled, or travel that you intended to take could be postponed. Check the terms of your booking to see if you are eligible for a refund – alternatively, some providers are allowing you to change flights to much later on in the year without any additional fees. If you have travel insurance and you are unable to travel, you should also check your travel insurance policy, but remember that policy wording and exclusions can vary so take the time to read the small print.
Once you’ve established your baseline, it’s important to create a budget. This means a longer-term look at any commitments that you might have coming up over the next few months. It’s also important to treat it as a living document – a budget only works if it feels realistic to your circumstances, which can change, particularly in the current climate we find ourselves in. Don’t be too hard on yourself, if you need to amend it, you can, just do what feels right. There are plenty of online resources such as budget calculators and tools to get you started.
4) If you can, keep a savings cushion
Whether or not it makes sense for you to save will depend on your individual financial circumstances. Generally, it’s advisable to keep a savings cushion to pay for any unexpected bills or challenges you might face during this time. It can also be a good idea to set yourself a goal. We find that people can save a lot more just by setting a goal for themselves. But if you’re worried about debt or are experiencing financial difficulty such as a loss of income, it’s a good idea to speak to your bank. They will be able to provide solutions that fit your personal circumstances – which could include deferring mortgage or loan payments or allowing you to access fixed-term savings products without any penalty.
5) Get help and support
It’s important to know that there’s plenty of help available and many people are in the same position as you. If you’re feeling a bit overwhelmed, contact your bank and they may be able to provide you with the answers you need. Some banks have already started to put measures in place to support those who might be experiencing difficulties, such as payment holidays on mortgages and loans, early closures of fixed savings accounts to access cash with no early closure charge and refunds on request for credit card cash advance fees, where you’ve needed to access cash in an emergency. Get in touch with your bank and see what support they can offer you