The global pandemic is having a huge impact on the economy. While it’s predicted that the UK will avoid a second recession, the effects of the first recession that took place earlier in the year are still being felt among residents across the country.
To counteract the financial fallout of the healthcare crisis, many businesses have had to furlough staff or make them redundant. This has continued throughout 2020 with 33,000 fewer people in payrolled employment in October compared with September.
Many of us have looked to get to grips with our finances in recent times. With so many people facing financial instability, it’s likely that many UK residents will be concerned. If you’ve been trying to manage your money while on furlough or since you were made redundant, or you’re feeling uneasy about your finances, here are some tips to help you budget during the Covid-19 pandemic.
Look at your spending
To get to grips with your finances, take a look at your bank statements from the last six months. Look at your income for each month and your outgoings, highlighting bills and other monthly contracts, such as your mobile phone.
Once you’ve accounted for these, look at your food shopping each month. This will show you how much you spend on food for your household.
This should leave you with additional spending. Is there anything that you can cut back on here? Any non-essential purchases are the best place to start when cutting back on spending.
Make savings
Now you have a clear idea of your income and outgoings, you can then look at where you might be able to make savings. When did you last change your energy tariff? Can you switch your phone contract? Shopping around for the best deals can help you save money, and this all adds up.
Similarly, what does your food shop look like? Can you shop somewhere cheaper? It’s worth taking the time to price up own brand products and looking at the numbers to see where you can save.
Create a budget
Set a monthly spending budget using the information you have about how you spend your money. Account for the regular outgoings and payments then look at what you have left over. If you have any money over, it’s worth putting this in a savings account just in case you need to cover any unforeseen payments.
Talk to lenders
It’s possible to take payment holidays on mortgages, credit cards, and other loans. If you think you’d benefit from taking a payment holiday, talk to your lender to see if it’s possible. Make sure you understand how much interest you’re likely to build up during this period, however. You could end up paying higher interest when the payment holiday comes to an end, so get all the details before you commit.
