Coronavirus: Money management expert reveals where cash could be found during lockdown
Coronavirus has impacted people’s finances in a multitude of ways. Incomes have been reduced, employment has taken a hit and more money is likely to be spent on energy bills as people are forced to work from home.
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Fortunately, several organisations from both the private and public sector have stepped forward to offer free advice where they can.
Moneyhub is one of these organisations and Samantha Seaton, the CEO of the firm, recently provided some actionable advice: “A good place to start is checking which providers are allowing you to freeze your subscriptions for free whilst on lockdown.
“Once you’ve suspended payments to your sports subscription, gyms, and other services, you’ll find a larger chunk of money sitting in your account at the end of the month.
“It’s also worth finding out which of your contracts might be coming to an end soon and researching where you could refresh your subscriptions to get a better deal, or cut them off entirely.
“You can also use your time to review the products and services that you use and identify where you could save some money.
“For example, are you aware of how much you pay in fees for your mortgage or investments? Could you be paying less? New regulations mean that financial services providers have to be more transparent, so take the opportunity to review and switch if necessary.”
A common target for financial planning is pensions and despite how it feels, now is a great time to plan for the future.
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Some people may actually find themselves with more disposable income in the coming weeks as they reduce spending on things like commuting.
Samantha details that this extra cash could be put to good long term use: “Why not also take stock of how much you are saving for later life?
“You can set up a recurring payment from the account that your salary is paid into, to go straight into your pension on payday.
“This could be just £10 a month, or an amount you won’t notice but will accumulate over time.
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“The money you’re saving from not travelling, or not spending on things like meals out or drinks at the pub, could be swept into a savings account. You’ll get more value in the long run from money in your pension, than in your current account.”
It’s possible that some people may feel that making a plan for relatively small sums of excess cash may not be worth the hassle.
Short term thinking of this nature is a common issue but Samantha highlighted that small amounts of money, the kind that people usually spend every day without a thought, can really amount to a lot if used effectively.
As she continued: “If you’re now working at home, then start with your commute.
“Sweep the money that you would be spending on travel into a savings account. Say you normally spend £8 every day, then that’s £40 in a week, and £160 over a month.”
While these examples are generalised, more personalised help can be sought by taking advantage of money/budgetary apps.
Even if people feel disheartened by an apparent lack of extra cash, these types of apps can identify previously unknown pockets of potential.
Spending habits can be monitored and abnormalities in costs can be flagged and rectified quickly.
Samantha concluded by explaining how everyone, even those who believe their situation to be hopeless, can benefit: “Money management apps are particularly good at categorising transactions automatically on your behalf, helping you calculate your individual average spend on entertainment so that you can save the difference during lockdown.”
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