Is COVID-19 affecting your financial health?
21st January 2021
Let’s be real for a moment. For the majority of us, there is a lot to worry about right now, and it’s easy to become overwhelmed by the enormity of it all, no matter how resilient you are. There’s a good chance your financial health is one of, if not the most worrying part of your life during this time, adding to the list of everything else on your mind.
If your finances have been negatively affected by COVID-19 - maybe through no longer being able to work, having reduced working hours or any drop in income - you may be wondering (or even panicking) about what you’re going to do next. Hopefully here you’ll find answers and a little peace of mind.
Check what you are entitled to
First things first, in times of hardship, always check what financial help and support is available to you right now. If you’ve been affected because of the Coronavirus outbreak there may be some benefits you’re eligible to claim. The Money Advice Service has lots of information on their website, as does the Citizens Advice Bureau so it's worth paying those websites a visit. If you’re currently unemployed, be sure to check if you’re eligible to apply for Universal Credit. Claiming benefits is surprisingly often forgotten about, particularly in young people, but you don’t want to miss out if you’re actually eligible.
Make a list of your priority bills
Bills and rent/mortgage payments are most likely going to be your most essential expenses (aside from food), so not only do you have to prioritise these first, but prioritise them each individually too. With multiple payments and bills, it can be hard to know which should always be paid first, but it’ll usually be utility bills rather than streaming subscriptions. Work out if you can pay these priority bills first, then list everything else and factor those in. If you need advice, in addition to the sites above, you can try Tully.
Plan a budget for the coming months
Budgeting and tracking your money is a great way to help you get back in control of your finances. There are lots of free online resources out there that can help you do just this, plus check out our post: Why Budgeting Is Important - It's The Best Thing You Can Do This Weekend. The Money Advice Service has a free online budget planner worth checking out. Make sure you plan ahead and have as much information to hand before you start - like your bank statements and bills - as more up-to-date information will give you more accurate results. Simply enter your income and expenses and their online calculator will give you a helpful breakdown of your finances.
Talk to your creditors
If you find yourself in a tough spot and cannot meet your regular repayments on things like personal loans or other credit products, the worst thing you can do is ignore it. Many creditors are more than happy to help and discuss ways to help you get through whatever challenges you may be facing. Ignoring it and avoiding repayments may have a negative impact on your credit score. This means speaking to your creditors should be one of the first things you do once you realise you are unable to meet your repayments.
Talk to your bank
It's worth having a look at Coronavirus help pages that your bank has published. Banks are offering lots of help right now for their customers. If you find yourself in financial difficulty you may be able to apply for short term payment holidays on your mortgages, gain help with overdrafts or request other forms of help like payment deferrals - just ask. For example, HSBC is extending the interest-free amount you can borrow for a temporary period of time. Plus, any payment freezes or payment holidays shouldn’t worsen your credit file, according to the FCA’s guidance.
Most importantly, remember that there are always people and organisations that will help you, especially in difficult times, even if it’s just a casual conversation with family and friends for your mental wellbeing. It can often be hard to ask for help, but with COVID-19 it is more essential than ever to find out how you can get a helping hand for a little more financial stability and a little less financial stress.