Salman Haqqi, personal finance expert at money.co.uk said: “The fairly flat figures from the UK Finance Household Review for the first three months of 2020 reflect the turbulent start to the year. This March saw UK pubs, shops and offices close down, the mortgage market grind to a halt, and the furlough scheme introduced by the government.
“As a result, consumer spending has been down, and for those fortunate enough to not see a reduction in their salary, the coronavirus outbreak has provided an opportunity to save. Changes to daily routines, like picking up a coffee or breakfast on the way to work, or meeting friends for dinner and drinks, means that monthly outgoings have fallen. In fact, our data revealed that Brits managed to save on average £396 in just six weeks of the lockdown.”
Use free online planning tools
Managing your cash flow or cutting back your spending is made all the easier with a budget tracking tool. You can use this free budget planner tool to put you in control of your spending. You keep track of your pay, benefits and your regular outgoings in one place and return to it at any time.
2. Keep track of your spending
Make use of the free tools that are out there to keep track of what you’re spending day to day, on your phone or computer. Some good ones are Emma (Smartphone only), Money Dashboard, Moneyhub and Yolt (Smartphone only).
3. Pushing the envelope(s)
One of the most simple and effective budgets is an ‘envelope’ budget. This simply means separating your money out into pots, or envelopes, for spending on different things. For example, you can create a pot each for household bills, food shopping and rent or mortgage payments.
4. Manage your money from your fingertips
If you’re tech savvy, you might be more comfortable doing most of your banking with your smartphone. You may find that your banking app lets you create these pots to separate out your money from within your current account. App-based banks like Monzo and Starling offer this service.
5. Keep your receipts
Whether you shop online or do your essential shopping safely in person, it is always a good idea to keep hold of your receipts. This way you always know how much you’ve spent as part of your budget. You might also want to create a folder in your email account to keep all your online shopping receipts in one place.
6. Use your budget to look forward
If you’re lucky, you’ve been able to continue working during lockdown and earning the same amount as before. This might mean that you’re actually spending less than you were before the COVID-19 outbreak.
Put aside what you were previously spending on eating out or going to exercise classes and save it in a separate pot or a savings account. This money can then be used towards the activities you want to do once the lockdown is lifted. Doing this might also keep your spirits up while you’re at home.
7. Check your bills regularly
With more people staying at home for long periods, bills for energy, water and mobile data may well be going up. So, now would be a good time to see whether these are services areas where you can save money by switching.
8. Open a second current account just for bills
Once you have a good idea of your monthly household bills, think about opening a second bank account just for paying them. You can set up a standing order to pay a regular amount from your main bank account to this ‘Bills’ account. But a few words of warning. Keeping a regular eye on those bills is a good idea as they may go up or down depending on your usage. It’s also worth understanding the impact that having several bank accounts may have on your credit record.
9. Cancel payments for services you can’t use
The UK Government has laid down rules on reasons you can leave your home during lockdown. This means you will not be able to go to places you would usually, like the gym. If you’re a gym member you may be able to cancel payments for the months you cannot attend or end your membership early. It usually depends on your membership contract. If your gym hasn’t contacted you about your options during this exceptional situation, it might be worth contacting them.
10. Use this time to manage your debt
Credit card debt can be a source of stress even during normal times. Several banks and credit card providers have brought in measures like payment holidays to help their customers through this difficult period. Some are waiving their fees for missed payments, so you may want to get in touch with your provider if you’re struggling to make payments.