After more than a year of turmoil and uncertainty caused by the global pandemic, taking a proper look at your personal finances may sound a bit daunting.
But as the Covid crisis begins to subside in the UK and life begins to open up again, now’s the best time to make the financial adjustments necessary to achieve the life you want.
A post-Covid financial review really could benefit you for years to come.
So now that there’s light at the end of the tunnel, here are some tips on how to start life after lockdown in better control of your finances.
Here’s the obvious one first. Budgeting is a vital part of becoming and staying financially stable as the threat of the pandemic recedes.
Creating a budget helps you view your money realistically and can be a simple process - as easy as setting aside certain amounts for your weekly food shop and separate amounts for monthly household bills. If this sounds a little daunting, the Money Advice Service can give you some independent help.
50/20/30 budgeting allows people to get a handle on their personal finances without too much effort.
The 50/20/30 rule helps give you a clearer sense of where your priorities should be - the idea is that around 50% of your income (after tax) should be spent on essentials, 20% goes on savings and repaying debts and 30% spent on ‘lifestyle’.
Put simply, it’s 50% on things you need, 30% on things you want and 20% for the future. Give it a try!
People have become used to spending less, thanks to a combination of job losses, furlough and lockdowns. As the UK starts to reopen, one of the most important steps you can take is keeping an eye on your spending and easing back into your pre-pandemic activities slowly. Don’t immediately splurge on doing all the things you love just because you can finally do them again.
Overspending can often happen out of habit, so look through your bank statements and check closely on what you’re spending.
It’s not about passing judgement, it’s about identifying your spending habits and using it as an opportunity to make changes.
List your spending in simple categories and ask yourself whether you need it, or if it makes you happy.
If it doesn’t do either, phase it out. Now is a great time to review expenses that can easily be cut out if they're not being used any more, such as music, TV or app subscriptions.
And don’t stay loyal for no reason - switching and comparison sites can help you identify savings for utilities and essentials based on your circumstances.
It’s also a good time to think about what money you may need for the next 12 months. It’s usually unexpected costs that cause the most stress, such as car repairs, but there are also recurring costs that tend to slip your mind, like insurance renewals, as well as costs you know are coming, like Christmas.
This last year may have tested us, but we’re getting through it.
As well as following these tips, you might also be considering a loan to help you through your current situation. Dot Dot offer short term loans as an alternative to payday loans to help with unexpected expenses.
Our loans aren’t right for everyone, and you should only borrow what you can afford to pay back. Read our FAQs to find out if a Dot Dot loan is right for you.
Short-term loans: 824.7% APR Representative Long-term loans: 79.4% APR Representative