Tips on how to save money during Covid-19
Tips to save money during Covid-19…
You may have heard recent reports in the media that Covid-19 is enabling lots of people to save money?
The theory is that many people are now spending less money, either because there are things that they don’t need at the moment or because those things are not available to buy because the businesses are closed.
So for example, people may be spending less on :
- eating out eg restaurants, cafes, pubs
- recreation and sport eg gyms, cinemas, music venues
- personal services eg hairdressers, salons, nail bar
- travel and holiday accommodation
- clothes and cosmetics
- furniture, home appliances and electronics.
If you are still receiving your normal income during this time then yes you may well be able to start saving a bit of money. It could also be a good opportunity to pay off some debts. If this is you, then take a look at our article Want to Save Money But Don’t Know How? to find out more about how to pay off debts and save money.
But many of us are simply not in this position. We were struggling for money even before Covid-19 came along and things are now even worse. If you are on furlough from your job, or are self-employed and not able to work, then we appreciate that you are facing difficult financial times right now. Our recent article Financial Help During Covid-19 LINK explains some of the ways that you may be able to claim additional money to help you.
But what else can you do? Are there ways that you can save money during Covid-19? Let’s take a look:
Mortgage Payment Holiday
If you are a homeowner, then your mortgage is likely to be your largest monthly expenditure. During Covid-19, most mortgage lenders are now offering mortgage payment holidays to homeowners who have a mortgage with them.
This means that you would not have to pay your mortgage for up to 3 months. The money you owe (including interest) will remain on your mortgage account, so you will still need to pay it back later.
If you need to take a short term mortgage payment holiday, speak to your mortgage lender as soon as possible. Also check with them that the payment holiday will not have any effect on your credit record. This should not happen, but you need to be sure so that you can decide whether the payment holiday is the best option for you.
If you are having difficulty paying your rent, then you need to speak to your landlord as soon as possible. It is to be hoped that, given the current crisis, most landlords would be able and willing to come to an arrangement with you for reduced rent during this time. And if your landlord has a Buy to Let mortgage on their property, they are also entitled to a 3 month mortgage payment holiday, as above.
But if things are not working out, you are still protected. The government has put in place a new package of measures to ensure that no renter – in either social or private accommodation – will be forced out of their home during this time.
Landlords now have to give you three months’ notice if they intend to try and repossess the property. Which means that they can’t start the court process until after this period. Also, any housing possession action that was in progress as of 27th March has also now been suspended, so no evictions relating to that period can currently take place.
Again, the message here is to talk to your lender. They may be prepared to offer you a temporary payment freeze for up to three months, as long as this doesn’t increase your debt to extreme levels. They can also potentially offer other solutions, such as either reducing or waiving interest, or extending the term of the loan.
Whatever your situation, your card should not be suspended during this period, and your credit score should not be affected. But the key thing is to work with your lender so that they can help you.
The system of overdraft charges in the UK changed this month. See our article Watch Your Overdraft! For more information. But Covid-19 has brought further changes.
If you already have an arranged overdraft you can now request to pay no interest for three months for up to £500 of overdraft borrowing. If you either don’t have an arranged overdraft, or the limit is less than £500, you can contact your bank to request a new overdraft or increased limit, but this will go through the normal process of affordability checks i.e. it will not be granted automatically.
At the time of writing there is no obligation on companies, for example energy companies or water companies, to arrange payment holidays for customers. But the regulators for these industries – Ofgem and Ofwat – are urging companies to do whatever they can to help customers and keep homes supplied.
If you are having any difficulty paying your energy or water bills, either due to financial hardship or through not being able to top up payment meters or cards, then contact your supplier for help.
It’s also a good time to check all your other bills to see if there is anything else you could save money on. For example, are there memberships or subscriptions that you could either cancel or put on hold? Or could you switch suppliers for some of your bills – eg energy, TV/broadband, insurances. If you have a bit of extra time at the moment, it can be well worth researching better deals to save money.
This is a challenge for everyone at the moment. Whether you have managed to arrange home deliveries, or click or collect, or have to face the supermarket queues it can be a stressful process for all involved.
But it is also an opportunity to save money. Because you are shopping less often, and can’t just pop out for things you’ve forgotten, you need to plan more carefully.
First of all take time to check what you already have in your cupboards, fridge and freezer. It’s really important to use all that up rather than letting it sit there going to waste. So before going shopping, plan your meals for the next few days, where possible using ingredients that you already have. You can then make your shopping list to just add to what you already have.
Also consider batch cooking. It always seems to be the case that you seem to be able to make two lots of a meal – for example a casserole or lasagne – with less than double the ingredients. Worth a try! Then you can freeze the second portion for next week.
Shopping less often can also help you to cut down on non-essential items such as alcohol, fizzy drinks, crisps, chocolate, biscuits and cakes. In fact, if you are used to shopping more regularly, it can be a real shock when you do try to get a week’s shopping all at once. You realise just how much money you are spending; and how much of your shopping is not really essential.
So hopefully you can save money on your food shopping but still eat well during Covid-19.
We hope that the above tips help you to save money and survive financially during Covid-19.
Stay well, and remember to check back here soon for more financial and lifestyle tips from Loans 2 Go.