The financial effects of coronavirus have hit households across the UK very differently.
Broadly speaking, furloughed workers or those reliant on the gig economy have struggled to make ends meet. Those able to work from home, on the other hand – without the cost of a regular commute and with shops shut – have made savings.
While England’s second lockdown has ended, the tier system continues to impact peoples’ income and job security.
The Guardian reports that health advisers SAGE expect Covid-19 cases to rise over the Christmas period. Might further restrictions arrive in January and February to ‘pay’ for our Christmas freedoms?
Whatever the new year brings, here are five ways to save during coronavirus.
1. Eating in for less
Over the summer we were all encouraged to ‘Eat Out to Help Out’ as part of the Chancellor, Rishi Sunak’s plans to get the economy restarted. The government recently confirmed that 64 million meals were claimed during August.
With the scheme ended though, it might be time to return to the bread baking and Friday night ‘fakeaways’ of Lockdown 1.0.
Supporting local businesses is important – it keeps local people in employment and aids the community – but limit yourself to the occasional treat and keep an eye on those purse strings.
2. Reassess your cancelled subscriptions
Gyms are currently open across all tiers. Keen to get back, you might have already resumed your membership. But if you’re looking for places to cut back on your monthly subscriptions, could the gym be the one to forego?
With fitness classes available online, and with memories of your hour allocation of exercise back in spring, might you be able to stay fit while staying out of the gym?
Cinemas remain closed in the highest tier in England, but they are free to reopen elsewhere. But, with a third lockdown not out of the question, don’t be too quick to restart your cinema subscription. Also, revisit your home entertainment packages.
Netflix, Amazon Prime Video, Disney+. There is no end to the streaming services vying for your attention and your money, but subscriptions can soon add up. If you’re looking for a way to save money try streamlining your streaming services.
3. Build an emergency fund
The beginning of a vaccine rollout is great news, but it could be a long way into spring before we see a return to something bordering on normality.
If you’re cutting down on unnecessary expenses and looking to save money, be sure to put some of this saved amount into an emergency fund. We would recommend an emergency fund comprises around three months’ worth of income, but remember that you do not need to put that aside all at once.
Factor the building of an emergency fund into your monthly budgeting and you’ll soon have a safety net should a new lockdown force you out of work, back onto 80% pay, or temporarily close your business.
Knowing you have an emergency fund in place will give you peace of mind as you head into the new year.
4. Use the money you save to clear debts or pay your future self
Once you have an emergency fund in place, don’t stop putting money aside – just redirect it. Pay off any high interest debt you have, such as credit cards, and then start paying your future self.
Money placed into investments or your pension will benefit you in years to come.
The economic effects of coronavirus might have forced you to lower or stop making pension contributions altogether, but this could have significant consequences in the long-term.
Restart or increase contributions as soon as you can. You’ll benefit from an increased number of contributions, the effects of compounding and, if it’s a workplace pension, your employer contribution too.
Paying into a pension or investment won’t save you money in the present, but if you plan your budget around paying your future self first you’ll have peace of mind for the future.
5. Speak to us
The coronavirus pandemic has affected us all in different ways. Whether you or a loved one have been out of work, furloughed, or been forced to close a business this year, financial advice can help.
By taking a holistic view of your circumstances and finances we can help you put a plan together to build towards your long-term goals while allowing you to live comfortably in the present.
Saving money where you can, paying off debts, and paying your future self from your monthly income first, can all help to give you greater control over your finances.
Get in touch