The coronavirus crisis has affected every single one of us in the last few months. From social distancing to the lockdowns, we’ve all had to adjust. But if your finances have taken a significant hit over the course of the pandemic, several experts have unveiled some handy hacks to ease the strain.
Back in March 2020 the World Health Organization declared the coronavirus as a pandemic. At the time of writing, over 537,000 people have sadly lost their lives to the disease, while more than 11 million diagnoses have been reported, too. However, as we suggested earlier, this crisis hasn’t just threatened our health.
Indeed, the economic repercussions of the pandemic could affect us for some time to come as well. For instance, in June 2020 the Congressional Budget Office claimed that America’s finances will decrease by nearly $8 trillion in the next ten years. As for the United Kingdom, its estimates were also quite concerning.
Over the course of the current financial year, the Office for Budget Responsibility believed that the U.K. would rack up a huge coronavirus bill. The projections reached about £298 billion, which is the equivalent of over $369 billion. On that note, the country’s Chancellor of the Exchequer made a grave announcement in May 2020.
While speaking to the Economic Affairs Committee, Rishi Sunak admitted, “No doubt there will be more hardship to come. This lockdown is having a very significant impact on our economy. We are likely to face a severe recession, the likes of which we haven’t seen, and of course that will have an impact on employment.”
A large number of residents in the U.K. were already feeling the financial pinch prior to Sunak’s worrying assessment. By April 2020 more than two million individuals found themselves out of work, as per the Office of National Statistics. Alongside that, eight million people had been furloughed too, which meant that they’d receive 80 percent of their salary from the government.
The situation in America hasn’t been much better either, as The Guardian newspaper shared some shocking figures in May 2020. The publication reported that around 40 million people had lost their jobs in just over two months. In turn, that left the “national unemployment rate” at close to 15 percent, according to the Department of Labor.
If that wasn’t enough, Americans have also needed to keep something else in mind, too. While the coronavirus wreaked havoc on the employment landscape, the cost of treating it was just as problematic. Danni Askini could certainly attest to that, as she spoke to Time magazine back in March 2020.
Askini had suffered the effects of the coronavirus earlier that year and been forced to undergo various medical examinations and treatments. By the end of it, she was handed an invoice of just under $35,000. She told the publication, “I was pretty sticker-shocked. I personally don’t know anybody who has that kind of money.”
According to the Kaiser Family Foundation, those who have “employer insurance” could be charged an average of $9,763 if they have a mild case. However, that number is said to spiral when the disease causes additional problems. The organization notes that the costs might reach over $20,000 in instances like that.
So, when taking all of that into account, you’d be forgiven for feeling a little concerned about your finances at present. But as we highlighted earlier, different experts looked to calm the public’s nerves as the pandemic took hold. David Crawford was one of them, as he spoke to the Metro newspaper in March 2020.
Crawford worked for NatWest, a well-known British bank. He informed the publication, “These are uncertain times, and many people may be worried about being impacted financially as this global crisis continues. [But] by implementing these small measures, people can take the first steps to become more financially secure in the coming weeks.”
One of those “measures” revolved around a very real fear that some individuals have right now. Indeed, if your income has taken a hit due to the pandemic, you might not want to look at your bank statement. Yet in Crawford’s mind, it’s absolutely imperative to take note of just how much money you have in your account.
Even if you don’t like what you see, you can make plans regarding the management of those funds. You then might be able to save some cash. Crawford explained, “Use the time spent indoors to review your direct debits and recurring payments, to see if there are any services that you haven’t been using for a while or forgotten about and cancel them.”
Sarah Coles agreed with that advice too, as could be seen when she spoke to The Guardian in May 2020. She’s a “personal finance expert” who works for the Hargreaves Lansdown company. But in addition to that, Coles also implored people to avoid taking on loans, especially if it’s to aid their pre-pandemic outgoings.
Coles said, “If you try to plough on with your usual spending, you are going to end up with far too much month [left] at the end of the money. So, you need to make a note of everything you have coming in at the moment, and everything you are spending.”
As Crawford noted earlier, you can halt non-essential spending quite easily. But what about the necessary outgoings? How could you limit the cost of the things that you need throughout the week? Well, according to Coles, that can be achieved if you’re willing to make alterations to your shopping routine.
To help clarify her point, Coles used food shopping as an example. She told the newspaper, “When it takes an hour to queue for the supermarket, you’re not in a position to visit several of them. The easiest way to cut costs is to trade down to a budget supermarket, or from brands to own brands and essential ranges.”
On paper, this type of budgeting could appear to be fairly straightforward, especially if you’re keeping track of your outgoings. However, Crawford believes that rigid financial plans aren’t always beneficial in times like this. In fact, given all of the uncertainty, he claims that you should have a little leeway.
Crawford told Metro, “It’s important to treat your budget as a living document. A budget only works if it feels realistic to your circumstances, which can change, particularly in the current climate we find ourselves in. Don’t be too hard on yourself, if you need to amend it, you can. Just do what feels right.”
From there, Crawford offered some advice on how you could go about doing that. He added, “There are plenty of online resources such as budget calculators and tools to get you started.” It might sound daunting at first, but that could prove to be a shrewd move in the long run.
Furthermore, you might be able to alleviate your financial stresses in another way too, according to the creator of the MoneyMagpie website. “[You can] go through things that you don’t need [in your house] and sell them on,” Jasmine Birtles suggested to The Guardian. “eBay and Gumtree are your friends.”
But for some people, that still might not be enough to stay afloat. For instance, mortgage repayments and loans have the potential to weigh you down when your income takes a hit. In the U.K., though, plans were put in place to assist hard-up residents in those situations, providing that they asked for it.
The Guardian has reported that these “payment holidays” last for three months, so people don’t need to hand over the money during that period. The paper noted that the option to do this for mortgages is available up to October 2020. Credit card and loan requests, however, must be in for July.
However, the holidays aren’t exactly free, as the interest doesn’t stop accruing over the three months. Due to that, Coles offered up some important advice. She said, “It’s not an alternative to drawing up a budget and cutting your other costs. It should be an option open to you if you’ve done everything else and can’t make ends meet.”
Regardless of that, though, Crawford insisted that you shouldn’t be put off asking for assistance if you need it. After all, the options are there for a reason. He explained, “It’s important to know that there’s plenty of help available and many people are in the same position as you.”
Crawford continued, “If you’re worried about debt or are experiencing financial difficulty such as a loss of income, it’s a good idea to speak to your bank. They will be able to provide solutions that fit your personal circumstances. Get in touch and see what support they can offer you.”
Back in America, companies like Capital One and American Express both offered a similar option to struggling customers. But unlike the payment holidays in the U.K., the interest wouldn’t be a problematic hurdle. In fact, people could “skip” certain bills without worrying about the aforementioned fee at the end of it.
Meanwhile, Crawford touched upon another interesting point during his talk with Metro. Alongside the budgets and cost-cutting, he admitted that you should try to keep some savings separate from your other cash. And by adding to that pile, you might put yourself in an advantageous position if things took a turn for the worse.
Crawford said, “Whether or not it makes sense for you to save will depend on your individual financial circumstances. Generally, it’s advisable to keep a savings cushion to pay for any unexpected bills or challenges you might face during this time. It can also be a good idea to set yourself a goal.”
“We find that people can save a lot more just by setting a goal for themselves,” Crawford added. Birtles couldn’t help but agree, prompting her to make an interesting suggestion. In her opinion, it might’ve been a good idea to store up half-a-year’s worth of savings in a different location for an emergency.
“One of the things this crisis has shown is the importance of having a savings safety net,” Birtles told The Guardian. “If you are putting it aside, you need to know that $100 you put away now will still be $100 this time next year. And that means a savings account and not the stock market.”
Away from that, a financial writer offered up a suggestion of his own to help ease the strain. While Coles spoke about the inability to shop around for certain bargains in the current climate, Andy Webb disagreed to an extent. According to him, the internet could remove that particular hurdle.
Speaking to the BBC News website in May 2020, Webb said, “Shopping around for the best price is really easy when you’re doing it online. There are some you can use day in, day out to save money on everything from TVs to trainers. [And] an extra feature of these sites is the price history tool.”
“You’ll be able to see if the current price is higher or lower than usual,” Webb added. “[It’s] a handy guide to work out if the lowest price is actually the best price, too.” If that wasn’t enough, refunds are still possible for products that you might’ve purchased prior to the lockdown as well.
Helen Dewdney backed that up, as she also spoke to BBC News. Much like Webb, she was a blogger herself, and believed that the best way to get your money back was through email. That way, the shops would have proof that you contacted them. Then, Dewdney explained what you should do next.
“Offer [the store] the option of picking up the item safely and providing you with a replacement, or to take it away for a repair,” Dewdney said. “If the item is less than 30 days old then you are entitled to a refund. It would still be prudent to email the company and state that you want the refund.”
Dewdney’s suggestion tied into one of Crawford’s other tips, as he discussed refunds of a different kind to Metro. Before the pandemic came to the fore, people could’ve already made certain plans for the year ahead. And in some cases, whether it was for a vacation or music festival, payments would’ve been required to secure your spot.
Due to the uncertainty now, though, you could get that money back and add it to your savings pile. Crawford said, “Some events that you might have been planning to attend in the coming months might be canceled, or travel that you intended to take could be postponed. Check the terms of your booking to see if you are eligible for a refund.”
Crawford then concluded, “Alternatively, some providers are allowing you to change flights to much later on in the year without any additional fees. If you have travel insurance and you are unable to travel, you should also check your travel insurance policy. But remember that policy wording and exclusions can vary, so take the time to read the small print.”