The novel coronavirus pandemic has changed the way we live our lives. The economy has crashed, millions of people have lost their jobs, schools are shut, sports activities aren’t taking place, and people, particularly the middle-income earners, are facing the heat with the financial burden. Some employees have been furloughed, while others are laid off. With cases surging, the UK government has put the nation back to lockdown with no reports on when things will return to normal. In the midst of all this, people have bills to pay and debts to clear. So, how could one survive, particularly when they have a family to feed?
Surviving this phase will require more than just time. It is the right time to act sensibly and take a pragmatic view of what has happened so far and what steps are you willing to take next to ensure you keep fighting. This is the high time you take the finances seriously and eliminate or cut back certain expenses.
The good news is that there are certain steps you can take to blunt the impact of lost income and make the most of the available financial resources to keep yourself afloat during COVID-19, and possibly have a strong financial footing for the post-pandemic era.
#1 Get benefits you are entitled to
The UK government has launched the Coronavirus Job Retention Scheme, where the employees are eligible to get up to 80% of their monthly salary, which can be as maximum as £2,500. Your employer will file for the scheme with the government. And if your employer is eligible, all their furloughed workers will get these benefits. Also, if you are ill, you might be eligible for the Statutory Sick Pay (SSP).
On the other hand, for business owners or those who are self-employed, there is a Self-Employment Income Support Scheme Grant Extension that offers vital support in the form of two grants. Both the grants are available for a three months period – one from November 2020 to January 2021 and the other from February 2021 to April 2021.
The government is trying hard to keep the financial burden off people by providing certain benefits. For instance, if you have to pay for your car loan, the bank may provide you with a 3-month payment holiday, which is enough to plan your finances for future payments.
All in all, the UK government has issued a lot of benefits and schemes for its citizens that provide monetary and health benefits. You have to check and review all those schemes that you are entitled to. These schemes will surely help you lay off some of your financial burdens.
#2 Take a hard look at how you are spending
In this critical situation, any investment you make needs a thorough consideration. Make a list of things and rank them according to priorities. Pay attention to what you are spending today and what you were before in order to determine things that can be eliminated for the time being. You will have to learn the art of efficient spending. Look into all the subscriptions you have and only keep those that you still use and for the rest, cancel their services. Start cooking meals at home, instead of buying takeout every day, save the money you spend for Starbucks, and more. Saving is the key here. Eliminate all the unnecessary investments until your financial condition stabilises.
#3 Take out an emergency loan
An emergency loan can prove to be of great help when you are financially desperate. However, before you sign up for any loan, it is important to do your research on the cost of a loan ensuring you can afford to pay it back. If you decide to go down this route, here is a good comparison of the best UK payday loans, please remember late repayment of loans can cause you serious money problems. For help, go to moneyadviceservice.org.uk
#4 Build a budget
Building a budget itself is a skill. To build a budget, you need to understand your expenses. Create a list of your fixed expenses – debt payments, insurance, utilities, food, and housing costs. On the other hand, there are variable expenses that change over the course of a month or sometimes just weeks. These may include entertainment like Netflix and Amazon Prime, recreational expenses, fuel, and clothing. Put your expenses in specific categories to determine which ones to prioritise and which to eliminate.
This is a hard time for people across the globe. Smart living is the need of the hour. You need to understand your finances and requirements so that you don’t spend too much. Also, be grateful for what you have. Materialistic things can be built from scratch. You just don’t give up and hustle every day.