The coronavirus outbreak means this is going to be an incredibly stressful period, because although this is a health-based emergency, it’s also a financial-based emergency too. The more you can do now to plan ahead will save you time and energy – and importantly, money– when you might not be feeling at your best. This guide looks at how you can best manage your money.
Step 1: Do an emergency budget
If you’re worried about cashflow have a look at what you’re spending and what income you have coming in. You may need to cut back on as much as possible to get you through the next few weeks. It’s not going to be fun, but you’ll be pleased you did once it’s all over.
You can also use this time to think about longer-term savings using This Budget Planner tool or look at ways to cut the cost of your household bills such as switching providers for your gas, electricity or mobile phone contracts.
Step 2: Check your insurance policies
Check whether you have insurance policies that would cover your mortgage payments or replace some of your income. For example:
- Payment protection insurance
- Mortgage payment protection insurance
- Accident, sickness and unemployment insurance
These types of insurance are often offered with life insurance policies or mortgages and it’s easy to forget you have cover.
There is usually a minimum time period, which could be several months, before these policies pay out, so you should talk to your insurer to find out more, particularly if you are worried about redundancy.
Step 3: Use your savings
Do you have some savings you can rely on? Don’t assume you can’t get your money if it’s in a fixed term or notice savings account. Some banks and building societies are now saying you’ll be able to access them with no penalties. Check with your bank or building society if they’re able to help.
High cost credit – things to think about
If your credit rating isn’t so great, cheaper borrowing may not be an option for you and you may be tempted by other forms of high cost credit, such as logbook loans or doorstep loans to see you through the crisis.
These forms of credit can work out to be very expensive and you need to think very carefully before you decide to borrow in this way.
At Flexiwage our groundbreaking technology lets employees build payday around their life, not their life around payday. We empower employees and employers to make smarter financial decisions. We believe employers care about their employees financial wellbeing and we know that a happy employee is more productive and engaged. If you would like to learn more about our solutions please email; firstname.lastname@example.org or visit www.flexiwage.com