I don't know anyone who's finances haven't been affected due to the recent Covid-19 outbreak, whether that is negatively affected or you have been lucky to have been positively affected. Either way, you certainly will need to look at reviewing your finances after Covid-19 and I would start now.
Review Your Budget
If you find yourself having lost income due to the Coronavirus outbreak you will want to review your spending and put in place a budget to make sure that you can live within your means. Calculator.me has a great monthly budget planner tool to help your figure out what your outgoings are each month. Once you have written them all down you will know exactly where your money is going each month and how much you have left to pay off debts or put into savings. Writing a budget like this also helps you to stick to it. We used to have a strict budget which fell by the wayside a little over the last few years. Now we have less money coming in I am looking to stick to a proper budget again.
Set up a savings account
Even if you don't have a lot of spare cash, it is important to set up a 'rainy day' savings account. I think being self employed during the current crisis has hammered this home for me! We set aside a monthly amount that is put into a savings account by standing order, so we don't miss it each month. Ideally you will build up a savings nest egg equivalent to 6 months of your income - basically so that if something happened, you would have a 6 month buffer to fall back on.
Pay off debts
Once you have worked out your budget, and saved enough in your rainy day account you should start looking at reducing your debt. You will be paying interest on most debts so work out which one has the highest rate of interest and start paying that one off first, then move onto the next until they are all cleared. I find it helps to put the debts into a spreadsheet, working out how much you will pay off each month. It really helps to have an end goal in sight, and makes me more accountable every month. Remember once all your debts are paid, you will have more disposable money each month to spend on something nice or add to your savings.
Re-assess your mortgage
At the same time you might want to look at what is likely to be your biggest debt - your mortgage. You might be able to pay additional payments if you have extra money coming in at the moment, or you might want to see if you can re-mortgage to get a better deal. If you are really struggling financially at the moment, many mortgage providers will give you a repayment holiday - just give your mortgage company a call to go through the options.
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