While the primary concern of all families across the country is their safety and WELL BEING, the pressure that comes from having reduced or no income at all is leaving families in desperate situations. No one knows how long this will go on for however there are steps we can all take to reduce our outgoings, improve our financial situation and ride this out.
1.Don’t panic, you wont spend what you spend usually anyway
This first one might seem like common sense, however when most people work out their outgoings they factor in all the non-essentials, cinema, take aways, meals out, lunch money, coffees, breakfast clubs, nights out, clothes, toys, treats, days out, etc etc. All of these expenses are no longer there because everything is closed and unless you are addicted to online shopping then you will struggle to spend anywhere near what you would on a normal month.
2. Delete the online shopping apps
Following on from number one, if you know the temptation is there and you might fritter a bit then delete the shopping apps. You can always download them again at a later date, but in these tough times you need to get tough.
3. Spend only on the bare essentials
The name of the game is to survive financially through this period. If its not food and basic toiletries then before you buy something you really need to ask yourself: “can I do without it for another month or so?” if the answer is yes then add it to your wish list, pinterest it or save it for later.4
4. Review your bills
All companies understand the dilemma we are all facing, believe it or not they are human beings at the end of those phones just like you and I, they are open to discussing your current utilities and bills, providing you do it calmly and respectfully.
*Tip* Ranting at a call centre worker who is working from home and struggling financially themselves is a sure-fire way to ensure you don’t get what you want. Instead ask politely for help. I.e.: “I’m in a really difficult situation and rather than move to another provider or cancel my contract I am ringing to see what can be done, can you help me please?”
A quick phone call to Vodafone this week and I reduced my bill from £81 a month to just £24, admittedly I had been lazy and not reviewed my tariff for a long while but within 24 hours I had been switched to a cheaper tariff saving me £684 a year.
What better time to buy yourself a bit of time cancel your direct debits, switch to a cheaper provider and pay the final bill when it comes in in a months’ time
5. Speak to the council about taking a council tax holiday
Some councils have already been granted funding to help people struggling with paying their council tax. A call to your local council offices could mean that you can take a payment holiday or pay a reduced amount for a period of time. If you don’t qualify for any help then again you may want to consider cancelling your direct debit and paying it off when you are back in work.
6.Take advantage of mortgage holidays
All mortgage providers are geared up for allowing homeowners to take payment holidays. This week my partner phoned her mortgage provider and arranged a 3-month payment holiday, they simply extended the term of her mortgage by a further 3 months giving her some well needed breathing room.
The old saying goes “if you don’t ask, you don’t get”. The key here is how you ask for help. Before calling your mortgage provider you must prepare before the call and have your story straight:-
- Why do you need a mortgage holiday?
- What has happened to your job and income since this outbreak?
- Why can’t you use savings to pay the mortgage? (because no one knows how long this will go on for and you need them to feed your family just in case).
- Are you prepared for an increase in your monthly mortgage payment amounts? an extended term? or to pay the missing months in full once you return to work? Your provider will want you to do one of these.
- When will you be able to recommence payments?
When you make the call remain calm, make your case why you need a payment holiday and above all else be polite, because the minute you raise your voice on the phone or get flustered, you’ve lost.
7. Ask your landlord for a payment holiday
In the same way that mortgage providers are providing relief for homeowners, under the governments interruption to business support your landlord can take a mortgage holiday which gives us tenants some breathing room as well.
The government have said that landlords cannot evict tenants during this period and this is great news. I made a phone call last week to my letting agent informing them I was going to need to take a payment holiday. I explained that I would be able to pay the missing months in full within 3 months but through this period I needed to ensure I have enough to feed myself and my children when they stay here. They asked if I could pay something towards the rent and I explained that I have some savings but due to the uncertainty at this time I would not be touching them as no one truly knows how long this will go on for and whether I will need to use those savings for food in the coming weeks. They went away and spoke to the landlord who was going to look into taking a mortgage holiday on the property I rent.
Bare in mind some landlords will own the property outright and not have a mortgage at all and some landlords will also have rent guarantee insurance for situations like this. Again “if you don’t ask, you don’t get”.
8. Use e.savers to save and pay back what you owe quickly
As you are spending less through this period you will notice your bank balance increasing. The temptation will be for a treat at the end of this but don’t kid yourself, if you’ve taken payment holidays then you owe the money, it isn’t free money, it isn’t going to be forgotten and unless you fancy appearing on can’t pay wel take it away, then you need to ensure the money that’s building up in your account is used to pay off the bills you’ve been accumulating.
I personally use e.savers as a way of saving money within my current account online. All banks and building societies offer this facility and you can generally open as many e savers linked to your current account on your online banking. They are usually set up instantly and you don’t need to visit a branch. Once they appear on your online banking you are free to move money in an out of them without any charges whatsoever.
Think of them as money boxes, the kind you had as a child, with each one dedicated to paying something. One could be rent, one could be utilities etc, it’s up to you but the key is to get the money out of the main account and into one of the money boxes.
*tip* Please don’t think like your great grandparents and draw the cash out because it will end up going through your hands like water. Our generation is nowhere near as savvy with cash and you will end up in a complete muddle.
As a self-employed person I have used e savers to save my tax and national insurance contributions for years and that ensures when the bill comes the money is there. Once its moved out of my main current account and into the e.saver I can’t spend the money until I personally move it back into the main account. If it’s out of sight it’s out of mind until I need it.
9. You have the time
The biggest excuse I hear from people is “I’ll do it when I get time” or “I’ve got so much on I just haven’t got around to it” etc. At this moment in time we all have a glorious opportunity to do all the little jobs, make all the calls, write all the emails that we’ve been putting off. Invest a day into improving your financial position now and you will reap the dividends in the coming months.
I hope this has been useful. Be sure to check our pages again in the coming days for more money saving tips