For the past few months, despite writing regularly about the importance of budgeting, setting up savings goals, etc, I have always found something more pressing to do than sort out my own personal finance admin. Scrolling through Instagram, for instance, or washing my hair.
Suddenly, in the midst of overwhelming uncertainty about what the future holds, sitting down and looking at how I might tide myself over for the next few months feels panic-inducingly urgent. I am self-employed, so no sick pay for me, but at least, as a home-working writer, I am well used to self-isolation and anxiety.
Many of you on full-time salaries may now be facing reduced hours, or the spectre of recession or redundancy. So here are nine quick things you can do right now to try to squeeze out some extra savings, because it looks like we’re going to need it...
1. PAY YOURSELF FIRST
This won’t make you immediately richer, but it will stop you wasting whatever you have got coming in. Most of us are terrible at monitoring our spending, or thinking about saving upfront, operating along the lines of, ‘Oh, I’ll save what I’ve got left at the end of the month’ – therefore, zero.
Sit down and look at your essential outgoings, stuff you cannot avoid, for example, rent, bills, basic food needs, as well as any debt repayments. Subtract this from what you are earning. The difference between the two is what you’ve got left to either trim back or save. Work out what it is you can afford to save (now is the time to shore yourself up with an emergency pot of at least three months of spend, if you can stretch to that). Move this money into a new account as soon as you are paid. Similarly, make all essential outgoings (rent, mortgage, bills, etc) come out on the same day, so you’ve only got left in your current account what you’re ‘allowed’ to spend.
2. IF YOU’RE SAVING FOR A HOUSE, GET A LISA
The Lifetime Isa offers free money from the Government, up to £1,000 a year on up to £4,000 a year savings, if you use the money to buy your first property, worth no more than £450,000. You need to be under the age of 40 to open one and you can’t withdraw the money without a penalty unless you use it for a home – though, if you change your mind, you can leave it there until you are 60 as a boost to your pension.
- OPEN A BANK ACCOUNT THAT PAYS YOU
A few banks are still offering cash payments if you switch your current account to them. New HSBC customers get £175, while First Direct is offering new customers £100 as well as a 0% £250 overdraft, which is a quick way to save money at the moment if you are under pressure financially – especially given the interest on many overdrafts is to rise to 39% from April.
4. FINALLY GET ROUND TO CANCELLING THOSE UNUSED SUBSCRIPTIONS
If you weren’t going to the gym/new Pilates studio/£300-a-month workspace before, you are certainly not going now. Have a proper look through your bank account to see what memberships and subscriptions you can cut back on. Apps Bean and Emma are great at spotting regular payments you don’t use and will help you cancel them.
5. STOP WASTING CASH ON ANY DEBTS
If you use a credit card regularly but you don’t pay it off in full – ie, you are paying interest on it – stop, especially if you have any savings, which will be earning only a fraction of the interest rate that
you have to pay on any bank debt. If you can’t afford to clear it, take out a 0% balance transfer credit card and move your debt across. Look for one with a low, or no, transfer fee.
6. MOVE YOUR BILLS AROUND
Social distancing means you have a bit more time on your hands, so use it to examine how much your bills are costing. If you have been with the same energy provider, broadband company or insurer for more than a year, I can guarantee you will be paying more than you need to. Call them to haggle a better price or switch elsewhere. Get a SIM-only deal for your mobile phone if you are out of contract as it’s always cheaper. It’s a hassle but, when times are tight, worth the effort.
7. IF YOU HAVE A MORTGAGE, TAKE ADVANTAGE OF LOW INTEREST RATES
Mortgage brokers are calling this ‘an extraordinary time’ to lock into low rates if you have the opportunity to remortgage any time soon. If you are without work at the moment, or struggling to repay your mortgage, banks are offering three-month holidays, but be aware that this is not that three months’ worth of repayments are wiped out, rather that the money is deferred until a later date. If you want to pause your mortgage, don’t just cancel your direct debit, which could ruin your credit score. Instead, speak to your bank first.
8. USE CASHBACK SITES
While shopping online a lot more, you may as well sign up to a cashback site that rewards you with money, or discounts, for doing so. Two of the biggest are Topcashback and Quidco; you sign up then do your shopping through their website.
I use the app Airtime Rewards, which works in a similar way – you simply link your bank cards then earn back a percentage of your spend at certain shops (including Boots and Waitrose) automatically, no need to do anything. Any money earned is set against your mobile phone bill. I don’t earn much, but it is oddly satisfying to watch the pennies ping in.
9. GAMEIFY YOUR SAVINGS
We can still run outside (at the time of writing) so consider linking up Strava to your bank account to make it easier to save without noticing. You need a Monzo account, and the app IFTTT, which lets you reward yourself – for instance, £1 per kilometre, moving the total into a separate pot. Meanwhile, the apps Chip and Plum help you save without really noticing, using AI to analyse your bank account to work out how much you could set aside; while Moneybox lets you round up each spend to the nearest pound, investing the difference
READ MORE: Coronavirus: What Should I Do If I Had A Wedding Planned This Summer?