Worried about your cashflow? Here’s how to face down your finances

The lockdown has brought the nation together in many ways. However, millions of people are facing major financial upheaval – and it can be hard to know where to start if you need to tackle your cashflow.

Let’s face it, budgeting is no fun at the best of times, but taking just 20 minutes to take a good look at your finances is worth doing – even if it means just knowing what help you’re going to need.

The basics

The hardest thing about budgeting is getting started. So be honest, you’re going to prevaricate loads before you sit down and face down the finances. So have a potter about, tidy up a bit, anything to help clear your mind.

Now, pour yourself a cuppa/glass of wine/beverage of choice, turn on the computer or grab a pad and go through the basics. But set yourself a time limit of no more than 30 minutes. Just getting started is the most important thing.

You can download free apps, watch flashy guides on YouTube or check out lifestyle blogs from ridiculously organised people (it’s okay to hate them). But budgeting is best when it’s basic. A simple spreadsheet is all you need or a blank piece of paper.

Get a list of your direct debits and standing orders form your bank accounts. List out when your regular payments are due and total up the cost, then compare it to what’s coming in. In a separate column, include things that you pay as you go, like the food shop, travel (when we can again) and fun stuff like entertainments and takeouts. Guestimate what you’ll need – though some banks have apps that give you a pretty good idea of where your monthly spending goes.

And that’s it. But what if there’s not enough cash?

Contact your creditors

The rules about financial difficulties are clear. If you’re struggling to meet your financial commitments and ask the business for help, they should come up with some solutions for you to help you buy some time while you get back on your feet again. They should also consider suspending interest and charges for a short period if it’s making your situation worse. This doesn’t mean money you’ve spent will be refunded, but it does mean that money you’ve been charged on top might be reconsidered if there’s a good reason for doing so. Loan and credit payment holidays are available too so ask and explain if you’re struggling.

If you don’t need it, cancel it

Not using that gym membership? Do you rarely tune in to that TV streaming site? How about that healthy lifestyle app that’s £5 a month? Every little bit adds up – so ditch what you don’t need. You may be surprised by what you find. Online statements and busy lives mean we don’t often notice or realise we’re overpaying for contracts that have ended, been billed for subscription traps after free trials or have forgotten to cancel things like old mobile phone insurance policies.

Get a (free) plan.

If your financial difficulties are ongoing, then speak to a free service like StepChange, a charity set up to help people get back on top of their finances. They’ll contact your creditors for you and negotiate payments you can afford. It’s not easy, but it’s a solution. Never pay for a debt management service – there are free options out there.

Be realistic.

This bit sucks but I’m afraid it’s necessary sometimes. There are times when you look at your finances and it’s apparent you can’t afford your property. If that’s the case, speak to the mortgage provider about your options when the pandemic has calmed down a little. You may find downsizing to a cheaper property is a better option than defaulting on your mortgage. No-one likes dealing with problems that threaten your security. So if you’re worried about paying your mortgage then speak to the lender early on so they can come up with solutions for you.

How the coronavirus is changing everything.

First things first, yes, it’s going to be hard to get hold of the businesses you need to speak to if you’re finding cashflow tough. But stay calm and persevere.

You can apply for a mortgage payment holiday (and help to buy loan holiday) through your lender. The Government has said no repossessions during this period and you should complain if you’re charged more money or threatened with debt collectors. https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters

Need to claim Universal Credit? Here’s how: https://www.understandinguniversalcredit.gov.uk/coronavirus/

If you’re a carer, helping a disabled or older person or need to be on the ‘extremely vulnerable’ list, go here: https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19

Self-employed? There’s a new scheme to offer support for you too, though not everyone will qualify:  https://www.gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals

Renting is the big concern for many people. We’ll be updating our guidance on this each day. Here’s the latest: http://news.resolver.co.uk/rent-and-coronavirus/

Our friends at MoneySavingExpert have a ton of financial advice and tips that regularly updates here: https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/

And finally…

Dealing with difficult decisions about your finances can seem overwhelming. But once you tackle them head on, the pressure is much less than the burden of worrying but not knowing. There is help out there. And we’re here to help you too.