Since Covid19 struck, many of us have been concerned about the financial impact. We may have been forced to take a pay cut or been furloughed if we are employees. If we run our own business, we may have found that customers or clients have gone very quiet. We may be looking at a reduced income, while bills and commitments seem to remain just as high as ever.
At Continuum we are looking at ways to soften the blow if you are looking at a personal cash crunch – and finding ways to save on everything from groceries to your mortgage – and more.
The first step to dealing with a cash crunch is working out where your money is actually going. Start by getting your bank statements and bills together, and tot up the numbers. You can use a spreadsheet if you are technical, or a sheet of paper if you are not.
Seeing exactly what you have coming in and going out each month will do three things. First, it will help you see how much you need to cut your outgoings to get them in line with your income. Shopping around may take time, but it can reduce what you spend considerably.
Comparison sites can help you save on large costs like TV packages, mobile phone contracts, and energy bills. Shopping around online is easy and can save you hundreds of pounds with a click of a button.
Second, it will probably help you see that you are paying for things you don’t need. Gym membership, subscriptions for online services you don’t use, insurance policies for phones you dumped years ago. These can be easy to sort out with a few emails or a call to your bank.
Thirdly, it will let you see just how much you are paying for debt. The biggest drain on your money could be your credit cards. Fortunately, there are ways to fix the problem.
Cut the cards
With cash short, it is tempting to load up your credit cards, but they are a costly luxury. Interest rates of 20% or more are common, meaning that they actually make your cashflow worse in the longer term.
The solution is first to stop using credit cards, unless it is a dire emergency – and to stop paying interest on the balance you have built up. The easiest way to do this is to find a card with a 0% balance transfer offer. Credit card providers may provide an interest-free period as a way of attracting new customers. Look at the comparison sites. This type of offer is harder to find than it used to be, but if you can find one it allows you to shift your outstanding debts onto a new card where you can pay it off without incurring interest for up to two years. Ideally, you would pay it off in full before the 0% offer runs out, but in current time, simply paying off the minimum each month should stop the debt from getting any worse. You should find another transfer offer when the introductory period ends.
Find a new home for your mortgage
You may be able to save on your mortgage. Repayment holidays may be a matter of last resort, but although rates are at historic lows, your lender will be happy to keep you on their Standard Variable Rate, and paying more than you need to each month. At Continuum we know the deals that are available across the entire mortgage market including deals that are not publicly advertised. We aim to help you save each month with a remortgage to take advantage of the low rates and the fact that the value of your home may have gone up, which can make them lower still.
How else can we help you?
A call to Continuum might open up some other ways to save. We could help you look at your insurance cover, for example. It may be possible to get a better deal on the cover you need.
We might also be able to find ways to increase your income, as well as reduce your outgoings. If you are living on savings, a pension or investments we may be able to look at your current arrangements and find ways to make them more rewarding.
If the current economic situation is worrying you, a call to us at Continuum might help you find the solutions you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to a suitable mortgage product or saving and investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
The value of an investment and income can go down as well as up, Your capital is at risk, you may get back less than you originally invested.