As we move into week 6, Second Phase, the Hard Yards, or whatever you want to call it, the change in the weather certainly brings a different feel to life at the moment. The extended holiday period has finished, for sure.
We are being told that it’s now that we start to do those ‘Round to it’ jobs – things we know needed doing and have never seemed to have the time for. Or they have never seemed to get to the top of the ‘To do’ pile.
We hear that gardens are now looking pristine, better than they ever have at this time of year, most minor DIY jobs are done and the bigger ones are waiting for materials and equipment, or the professionals to be able to start.
So why not apply some of this gifted time to look at your finances – one thing we are being told time and time again, is that household expenditure has fallen significantly. Everyone is realising just how much they were spending on the meals out, trips to the cinema, travelling (fuel, weekends away) and so there is a financial education/realisation element to this lockdown. That’s something we should all use wisely and consider how or what can we do differently to take value from this period of isolation.
Here is our Spring Clean checklist, which is a way to start with the basics, from which we will explain how you can build more detail in next week’s article.
Warning – It’s a bit like starting your first exercise programme, lots of pain in the first bits, but it gets easier and you become more motivated as you progress – well, most people do, but it might need a bit of chocolate and/or wine as reward along the way!
- Review your debts – Check the interest you are paying on any loans and liabilities and pay off the most expensive (highest interest rate) first. Or, where your resources/funds for repayment are limited, look to see if you can reduce the cost. There are still a number of 0% credit card offers available, giving you 24-26 months to pay it off – BUT if you are going to use these, make sure you pay it off, by dividing the amount by 24 or 26 and make that your monthly payment, via Direct Debit.
- Take control of expenditure – with ‘life in the slow lane’ it’s a good time to review your expenditure and see where savings might be made, to reduce unnecessary discretionary spending (waste!) and create/increase your monthly surplus
- Cash buffer – If you have operated on a month by month basis, the current environment has taught us all that a contingency reserve is a valuable pot to have. You might not earn much interest on it, but that’s not the purpose – its so you can ride out difficult times, such as were are experiencing, a job change, sudden unexpected expenditure e.t.c. Rough rule of thumb is to have 3-6 months net income, in instant access cash
- Protection – this is a catch all title. We insure our houses, cars, valuables, smart phones e.t.c, but only 30% of us have any form of life assurance or income protection. So the element of our lives that makes it all tick (and by that we mean you!!) are unprotected…..think what would happen financially in the event of a serious illness (very topical) preventing you from working for a long period of time? Or, whilst less likely, but even worse, should you die? Give your protection matters a look over and be honest – is it enough, for your lifestyle and what you would want for you and your family
So that’s the start – find some time this week and why not give us a call or drop us an e-mail to share what you have found. Our advisers are still working flat out, helping people to take control of their financial situation even in these difficult times.
Next week we will look at longer term savings and how to get started. From little acorns, do mighty oaks grow. Stay Safe and well
Andy Dyson & the T&R Team