Many of us at the moment are having to be extra careful with our spending, with the uncertainty of COVID-19 and reduced work hours etc. So here’s some suggestion to help…
If you have a look at your online banking and find where you manage your regular payments, under ‘Direct debits’ and ‘Standing orders’ – you can go through the list with a critical eye. If you have other adults in your household, who also contribute to the bills, it may be worth doing this with them.
Group your outgoing payments into ‘essentials,’ ‘nice-to-haves’ and ‘non-essentials.’ Anything you really don’t need for the next few months may be worth cancelling. Ideally any non-essentials should be cancelled directly through the provider, rather than with your bank – as this way they’re aware of the cancellation and won’t chase you for a payment you cancelled.
The nice-to-have category are things you can decide how valuable they will be to you in the foreseeable months and decide if they are worth keeping or for how long or with conditions, dependant on your circumstances and how much your savings would be.
All your savings add up. So, cancelling two £10 subscriptions can save you £120 over six months, which could then contribute to an essential outgoing instead, like your energy bill.
Even if you don’t cancel any of your outgoing payments right away – it’s worth keeping on top of non-essential payments going forward, when you may need to save more money later on.
These are likely your most costly spending, but there may be some work around. If you’re renting, it’s unlikely your rent payments are negotiable during your tenancy. You can try to speak to your landlord if you’re really struggling and they may be a bit more lenient at the moment – although it is generally just a fixed payment.
There’s a little more flexibility if you have a mortgage – depending on your lender. They may be able to offer to reduce your monthly payments or take a break from making payments. Your mortgage balance wouldn’t then go down, as a result.
Switching to cheaper deals on your other bills can help you save a little more, so it can be well worth searching for a cheaper alternative. Your electricity, gas and water bills can be reduced if you’re willing to spend a little time looking for reduced prices. Most switching services offer guarantees that you won’t be left without your supply during the process and most providers will help you to switch smoothly.
Your credit card payments…
It is worth ensuring you’re still paying off at least the minimum payment on your credit card every month, even if you can’t clear more of your balance at the moment. If you don’t pay at least the minimum, which is usually about 5% of your balance, you’ll only end up with late payment fees – so will end up paying more and this will negatively affect your credit score.
Your Insurance is among your essential payments. If the worst happened and you found yourself without your Insurance, your repair or legal costs as a result would be much higher and you’d end up spending more. You can look to reduce these costs…
Motor Insurance – There are some discounts available for reduced mileage, for restricting who drives the vehicle and general restricted use.
Household Insurance – You will want to keep at least your basic Buildings and Contents cover to benefit from having Home Insurance, but removing optional extra cover from your policy will reduce your costs.
Business Insurance – You can reduce your sums insured if you have less stock during the crisis.
Call your broker to find out how they can help you to cut your Insurance costs!
Overall, there are reasonable adjustments you can make to your monthly outgoings to put you in a better position amidst the Corona outbreak, that are certainly worth looking into. You can make changes over the phone, via e-mail or manually online – so you can stay safe at home, whilst you save money.