The Coronavirus pandemic means we are all going through a very stressful period. This is not just a health-based emergency, it’s also a financial-based emergency too. The more you can do now to plan for the future will save you time and energy – and importantly, money – when you might not be feeling the greatest. This article offers great tips and advice on how you can best manage your money, what help is available to you from your creditors, and things to think about if you are needing to borrow money.
Firstly, check out this helpful guide ‘Coronavirus, your rights and entitlement’ from the Money Advice Service. This article details what you are entitled to if you are employed, unemployed, or working in the gig economy.
Secondly, now is the time to put money aside for those rainy days. The grim reality is that people are going to lose their jobs, whether we like it or not. Having an emergency fund will help bolster your financial fallback. Now is the time to cut back on those unnecessary expenses.
Hope for the best but plan for the worst. I don’t like to sound like a pessimist but it is always comforting to know you are ready for a worst-case scenario. If you have any niggling doubts about your job security or future cash flow - then prepare a budget! Look at what you are currently spending and find ways to cut back. My favourite budget planner is the one provided by Nationwide. Check it out here.
If this pandemic is affecting your finances now, or you think it will have an impact in the near future – Contact all of your creditors and request a payment holiday. Most lenders are required to offer a minimum 3-month break, and many will do so without much intrusion into your current circumstances. Short term lenders like Fast Loan UK are required to offer 1-month payment holidays. However, we are going above and beyond this and freezing payments for as long as our customers require them. If you are renting you can also request rent holidays from your landlord. Payment freezes will not negatively affect your credit rating but you will be required to make these payments at a later date and some lenders may charge interest. At Fast Loan UK we are freezing all extension interest for those requesting payment holidays or extensions.
If you are already juggling debts, and then face a sudden drop in income, this will have a severe impact on your finances. It will be the last thing you need right now.
In my experience I have seen how many people bury their heads when their finances get on top of them, and when things get tough it's easily done. However, there is free and independent help available. Debt Management charities like Stepchange are set up to relieve this pressure. They will speak to each of your creditors and arrange for small monthly payments through a Debt Management plan. All you do is make a single payment to the Debt Management company who will distribute the funds to each of your creditors. The single monthly payments you make to them will be based on what’s affordable to you. Check out a list your local Debt Management Companies here.
A little bit of further advice on Debt Management Companies – Some are free and some are not. I would always start with Stepchange who are a Debt Management Charity and do not charge.
Firstly, always try friends and family first, as this is normally a cheaper, more flexible way to borrow. If this is not available to you, make sure you choose the right form of credit or loan for your situation.
Shop around and compare deals, looking at:
- The interest rates and APR
- How much you will have to pay per instalment and whether this is affordable and sustainable
- Any penalties for missed payments
Bank loans, Credit unions, and peer to peer lenders will normally be your cheapest option, as well as interest free credit cards. However, if you are time limited, or unable to access these source of funds - then lenders like Fast Loan UK could help if used responsibly. Before deciding to use Short term/payday loans, check out this information sheet 'what you need to know’
Coronavirus is having a big impact on most of our finances, which in many cases may negatively affect our mental wellbeing. When suffering from poor mental wellbeing you are likely to struggle to make the best money-based decisions. If you are feeling stressed, check out this Money problems and poor mental wellbeing guide. It offer practical tips on how to cope financially through the pandemic, as well as where you can get free specialist help.
We hope you found this short article helpful. We will get through this, and life will return to normal in due course! Keep a smile on your face and stay strong and positive for the kids :)