Salman Haqqi, personal finance expert at money.co.uk comments: “Financial anxiety can affect any of us, at any time. But COVID-19 has caused many of us increased money worries due to reduction in income and job security concerns. “It’s not uncommon for these money worries to keep us all awake in the early hours. But there are simple and straightforward ways to manage your money to help you feel more in control of your finances, and reduce anxiety. And it should always start with making a budget, so you can see exactly what your commitments are before you start spending on anything else ”
The easiest way to start combating financial anxiety is to keep a closer eye on day to day spending, work up a budget and stick to it. This way you can better identify areas to make savings and ensure your outgoings are not exceeding your income. Use this handy budgeting guide to get started https://www.money.co.uk/guides/how-to-write-a-budget.htm
The burden of debt is one of the biggest contributors to financial anxiety. So learning how to manage your debt is really important.
If you are on a restricted budget and anxious about meeting credit card or mortgage payments, you must speak to your bank to see what support they can offer.
Do remember when you take a debt payment holiday, you are still charged interest, which means that your monthly payment will increase and the total amount you owe could also grow.
Shifting existing credit card debt on to a 0% balance transfer card can be a great way to help clear your debts. Moving your debt on to a 0% credit card means that for a set period you will not be charged any new interest. Before committing to a new card, make sure you can afford to pay it back within the promotional interest-free period, to avoid adding additional interest charges.
If debt becomes unmanageable, there are free advice services such as Step Change and Citizens Advice Bureau.
If you’re fortunate to be earning the same but spending less than you were before the COVID-19 outbreak, use it to pay off existing debts or put into savings to protect you against any unforeseen circumstances.
Money management doesn’t have to be a stressful process and there are many apps and tools available that make it simple. Try out the likes of Emma, Yolt and Moneyhub to keep track of day to day spending, whilst app-based banks mean that your finances are at the touch of a button and easier to keep a closer eye on.
Read more about managing your debt during coronavirus here: https://www.money.co.uk/guides/managing-your-debt-during-coronavirus.htm