How to Stabilise Your Personal Finances Beyond COVID-19
The unprecedented financial strain of COVID-19 has been difficult for many households to deal with. For those still struggling, it may be time to try a different strategy.
Many people have found that their personal finances are in a less healthy place as a result of the COVID-19 pandemic. So, it is natural to want to find a way to get your money back on track. Here we take a look at ways that you can stabilise your personal finances beyond COVID-19.
It can be natural to see the impact that COVID-19 has had on the economy – and, more specifically on your personal finances – and think that the right thing to do is to make drastic changes. Whether that means moving your investments or looking to sell property straight away, these sorts of changes can be tempting.
However, it is important to understand that many things will actually go on as normal. Once the markets are over the shock there has been the suggestion that dips in the economy will not be as bad as feared and the fall in house prices will not actually be too substantial – around 3% according to Knight Frank.
Consider equity release
Of course, it may be the case that, like many people, a large part of your finances is tied up in your property. This can be a very frustrating situation if you have a house that is worth a significant amount of money, but that you cannot access without selling it. Thankfully it is actually possible to get access to this money through equity release.
Equity release can be “a sensible and practical solution for financing your lifestyle, home improvements, education or general income”. It involves essentially taking out an amount of money from the value of a property, which is then paid back when you die.
Make savings where you can
COVID-19 has left a world completely changed in its wake. For many people, this has caused a great deal of financial strain and challenges. However, it is important to note that there are also savings to be made that have arisen out of the situation.
For example, it may be the case that you are now able to work from home more often or perhaps that you no longer need to travel to work at all. If this is the case you may be able to actually save a significant amount of money. And there may be many different examples of this, where new circumstances have created a life that is cheaper for you.
Take advantage of government schemes
It is important to stay up to date with which government schemes are in operation. The UK government is well aware that this is an unprecedented crisis and that businesses and individuals need support in a way that would have been unheard of in the pre-COVID world. This will certainly be an evolving issue, and you will need to keep ahead of the game.
Of course, remember that the first port of call could be the government’s standard Universal Credit income support, which is always available. For anything else, it is wise to follow the government’s website.
Do not ignore payments
It is important to recognise that COVID-19 is not simply an opportunity to ignore your financial obligations. Whilst facing difficult financial circumstances is not something anyone wants to experience, it cannot be an option for you to ignore them and hope that they go away – they will not.
Do not delay making payments in the belief that you will have much more money in the future. If you do, then you can enjoy the benefit then, but for now, it is necessary to make the hard choices and keep up to date. This can help you avoid getting into further debt, incurring fines or damaging your credit rating.
Do not delay making payments in the belief that you will have much more money in the future.
Re-evaluate your budget
So, the solution, in this case, has to come from somewhere else – and this may have to involve re-examining your budget. As we have discussed above, COVID-19 has actually changed a great deal about the ways that we live and work, and it may be the case that you no longer need some of the more expensive aspects of your lifestyle.
Perhaps you and your partner have a car each, but it’s actually now extremely rare that you use both at the same time. This will vary from person to person, but it may be the case that you can save a significant amount of money simply by assessing exactly what you need to be spending money on.