Here we have listed what we believe to be the easiest ways to start taking control of your finances.
During these unprecedented time we are also including recent updates from the financial services industry on how you can manage your money, and the latest initiatives being rolled-out by the UK government, the UK regulators and financial institutions.
External website links. While we would never refer you to a third party that we felt didn’t provide useful information, we cannot always guarantee the accuracy of the information they provide. Unity Mutual takes no responsibility for their content. So please be mindful when visiting third-party sites.
Today (24th April 2020) the FCA have announced further measures to support consumer credit customers facing payment difficulties due to the coronavirus pandemic
The targeted temporary measures being implemented are a 3 month payment freeze for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements. For high-cost short term credit (including payday loans) payments will be frozen for one month with no additional interest to be charged.
For further information on these measures please visit the FCA website at:
The Financial Conduct Authority (FCA) have today confirmed a package of targeted temporary measures to help people with some of the most commonly used consumer credit products to help consumers during the coronavirus pandemic.
The rule changes will be in force from today (09 April 2020) and the full range of measures will apply by Tuesday 14 April 2020.
Consumers are being advised to check firm’s websites or social media posts for more information, and where possible use online services to request assistance.
For your reference we have noted the key measures the FCA have implemented below the weblink.
The measures include firms being expected to:
- offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by coronavirus
- allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months
- make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force
- ensure consumers using any of these temporary payment freeze measures will not have their credit file affected
This is your vital first step – essentially a detailed list of your income and everything you spend.
You may wonder why knowing where your money goes will help get things under control, but it’s really important. Once you can see what’s going where, you can start doing something about it. And that could mean you can start paying off debts or saving up for something you need, like a holiday or a car.
1. Start by making a list of everything you earn
Include wages, benefits and pensions. Convert everything into what you get per calendar month.
2. Make a list of everything you spend
It’s important to include everything, including small everyday purchases like snacks, as well as occasional things like birthday presents.
First list the big outgoings. Include payments that only happen every year or few months, like the car’s service (convert them into monthly amounts). Then add the smaller items, like travel and leisure.
If you struggle to know how much you spend on other things through the month, look at your bank statement. You can also record all your spending through a month, and use that as a guide.
3. Use a budget planner
A great way of making a budget is to use a budget planner. Here’s one from the independent Money Advice Service. https://www.moneyadviceservice.org.uk/en/tools/budget-planner
If you spend more than you earn, you need to do something about it. Here are some ideas.
1. Highlight all your optional spending
Make a list of all those things that you don’t absolutely need to pay for. This could include things like gym membership, buying lunch from a café or buying a morning coffee.
Work out alternatives, for example going for a run or doing exercise at home, making a packed lunch or taking your own coffee in a travel mug. Saving just £2 on coffee for every day you go to work could add up to £500 a year.
2. Cut your household bills
It’s surprisingly easy to save hundreds of pounds a year on reducing your bills. For example:
- Get a cheaper mobile phone contract.
- Find a cheaper gas or electricity deal – there are services that find you the best option.
- Find the cheapest fuel station near you.
See the Money Advice Service’s guide to saving money on household bills. https://www.moneyadviceservice.org.uk/en/articles/how-to-save-money-on-household-bills
3. Use Cash
Having a fixed amount of cash to spend over a week, or when you go on a shopping trip, is a great way to control your spending. As you see the notes leaving your purse or wallet, you get a very clear idea of how much you’re spending – and that helps you decide whether you really want to make the purchase
4. Get the whole family involved
Make a plan with everyone in the family, so everyone can do their bit. If you have children, you may well find that you can find cheaper ways to buy things for them, for example by getting a cheaper mobile phone deal.
The trouble with debt is that you pay interest on it, and that’s spending that you get nothing out of.
Start by paying off the debt that charges you the highest interest. Store cards typically charge the highest interest of all, followed by credit cards.
However, you must make sure you’re following the terms of your agreements and paying what you’re meant to pay when you’re meant to pay it.
Take a look at the Money Advice Service’s list of debt advice services. https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator
If you’re falling behind on payments for the really important things, like your rent or mortgage, energy bills, council tax, any fines or child support, then it’s time to get some help.
There are many advice services available across the UK, including local groups and organisations.
Take a look at the Money Advice Service’s list of debt advice services. https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator
It’s difficult to save if you only ever wait until there’s some spare money to put aside. The best idea is to save a little every month into a savings account. Even £10 a month adds up.
- First, aim for an emergency fund – ideally enough to cover 3 months’ expenditure.
- Then set a savings goal – for example saving up for a holiday. Then you won’t risk going into debt.
And most important of all…
Don’t ignore any money problems you have. They won’t go away if you ignore them! The sooner you face them, the easier they’ll be to deal with.
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