Life and money are inextricably linked and financial wisdom tells us that you should review and update your financial strategy regularly or when any lifestyle changes occur. Safe to say that Covid19 is a lifestyle change!
Now is a key time to consider what is happening to your household incomes and how you can respond. This is a key time to be both reactive and proactive.
Review your finances
- Check your budget in light of changes to your spending
- It’s not a good reason but could be a good time to do a financial detox: go low spend while self-isolating – chances are you’re already there without those brunches, take away coffees, deliveries, Ubers and transport costs each day
- Look for areas you can save and cut costs (no more travel costs anyone?)
- Review your debt and try to move to lower interest rates ( 0% credit cards)
- Since you’ve got some time on your hands – you could look at switching mobile, utility and broadband suppliers
Grow your money in uncertain times
- If you can top up your ISA before the 5th April deadline then do stash some extra cash
- Mortgages refinancing is always an annoying task but right now it could be very lucrative with the Bank of England having this week lowered the Base rate to 0.1%, literally the lowest it has been since the creation of the bank in 1694!
- Investment: like your face – don’t touch! For most people, it would be reckless to realise these losses by selling now
- Entering the market: The saying “never try and catch a falling knife” is worth adhering to at the moment. Don’t try time the market, as it honestly is anyone’s guess. If you want to take advantage of falling share prices, the best way is to drip-feed money into markets using a concept called “dollar-cost averaging”.
Protect your money
- Check your credit score
- Review your retirement pot – but just like your investments …don’t touch!
- Get educated – without a daily commute consider investing in yourself for 5 minutes a day by delving deeper into some personal finance books, articles, podcasts and of course there is always Blackbullion!
Protect your family
- Review your life insurance (and if you don’t have any, but have financial dependents, it is a good time to get some!)
- Make sure you have a will – a financial review is a great time to make sure everything is in order
Things to note
- Watch out for scams related to coronavirus (Covid-19) – at no point give your bank details to anyone, don’t transfer money to anyone who asks for it (no matter how good the cause they purport to represent!)
- There will be no run on the banks – the FCA has been working with the Bank of England to ensure consumers have access to cash through the ATM network
- Insurance: be aware that cover differs from policy to policy. If you are unsure whether you are covered for the outbreak, you should contact your provider directly. Insurance providers should be able to clearly highlight any exclusions that may exist
Immediate relief available
- Statutory Sick Pay (SSP) is to be paid from the first day of sickness absence, rather than the fourth, for people who have COVID-19 or have to self-isolate,
- Mortgage support: Households hit by coronavirus will not lose credit ratings if they delay payments – While a person is taking a payment holiday, the interest that would have been paid will still rack up, and the capital sum of the loan remains.
- As at the time of writing the government has not (yet) made a commitment to protect tenants who may also struggle with their rental payments. Likewise, we are waiting to hear about support for freelancers, gig economy workers and contractors etc [we will update this as appropriate]