Worry can have a strange procrastinating effect. But the best advice I can give is perhaps the simplest - just do something. Some checking, some budgeting, some saving if at all possible.
Times are tough, particularly for the tens of thousands currently facing redundancy. Family finances are stretched for millions of UK households and a recession is on the way but opportunities also exist that can provide hope and some confidence about our financial futures. Here are my thoughts on surviving the financial storm.
Whether it's been booking a staycation, a few beers in the pub or a family lunch - July 4th certainly brought us the glimmer of some much needed feel good factor. Unfortunately, despite a return to more normal spending habits, the widely forecast economic turbulence remains highly likely. The vigilance we have shown in protecting the NHS should now be applied to our personal finances. Sadly the UK has seen a surge in sophisticated scams recently - from doorstep hawkers to phoney calls and texts pretending to be from your bank. It is more important than ever to stay alert to those manipulating these strange times for illegal gains. If you do think you've been scammed then report the scam to Action Fraud on 0300 123 2040 and get in touch with your bank as soon as possible. It is also a good idea to check your credit file via a credit reference agency and search for any unusual activity.
TV and website viewing figures have skyrocketed since the pandemic struck. It is no wonder that so many of us are worried about how all of this will impact us. People are looking for reassurance but often the dramatic headlines, high level graphs and stats just add to the drama rather than providing meaningful answers. When it comes to the economic fall out of the crisis - we don't lack data - we're drowning in it. The hardest part is figuring out what it all means for our own lives and where possible avoiding the worry that so much dramatic news can bring with it.
The fact that most economists and politicians are open about the inevitability of a recession is frankly weird in itself. Normally, the language is guarded and deliberately vague. Not so now. The public grasped early on that no matter how much we might wish otherwise you simply can't stop most of planet earth from trading for months on end and then expect to crack on afterwards consequence free.
So what can we do?
Worry can have a strange procrastinating effect. But the best advice I can give is perhaps the simplest - just do something. Some checking, some budgeting, some saving if at all possible.
There has never been a better time to create or refine a simple household budget. More time working from home affords many of us time to plan and make sense of the detail of our financial lives. Really simple actions like checking all existing insurance policy details or making an appointment to get financial advice can often be a great help in alleviating worry. Taking simple actions can often help give us a sense of control over our money.
Research tells us that having some sort of budget can make a huge difference to our financial wellbeing. The habit of reviewing a simple budget once every few weeks could prevent financial problems and boost a sense of financial confidence.
"Finger to smartphone"
Spending so much time locked down can understandably feel stressed but it also provides the perfect situation to put pen to paper or perhaps 'finger to smartphone' and get clear on what comes in, what goes out and any potential pitfalls ahead.
Make sense of the gathering storm around us
There has never been so much financial news. We are bombarded with graphs and charts 24/7 - endlessly economic predictions and warnings to try and decipher. However, making sense of what is happening around us can also be really important if we are to regain or retain a sense of control over our financial lives.
Some job losses and a property price drop can all be reasonably expected - there will be some uncomfortable times ahead. So the message is to brace for turbulence now and then plan for some-kind of recovery later. But what kind? We keep hearing about the 'shape' of the recovery - but what does a W, V or U really mean?
It's easy to assume economic concepts are complex and highbrow but most of time they are astonishingly simple. In this case, the letter just refers to the shape of the graph when economic metrics like employment, gross domestic product (GDP) or manufacturing output go up and down. A V shaped recovery is the fast bounce back we all hope for but a glitch free rise back to normal is sadly unlikely. In a U shaped recovery there is no immediate bounce back but after a sustained slump things eventually start getting better. The normal period for this type of recession runs anywhere between 12 and 24 months. A double dip recession is often a feature of a more topsy-turvy W shaped recovery.
Whether you work in healthcare, hospitality (or the many other sectors that do not begin with the letter 'h') now is a great time to review the latest industry insights from your relevant trade body or membership organisation. Often this can help people feel reassured because the trends and forecasts tend to be thoroughly researched. It is also common for these sources to provide a lower level of detail than sometimes makes their way into mainstream news articles. There is also the advantage of being able to soberly digest the numbers and come to your own calm conclusions away from the drama of a news report.
What's next?
The next few months will be a bumpy ride for the economy and maybe for our personal finances.
But staying safe also means not drowning in data or negativity. Get all the help available, take time to budget and crucially stay calm. The economy has taken a big hit but keeping things simple will help us all navigate the approaching storm and ensure people stay as financially healthy as possible.
Get support and information
Check out impartial sources like MAS. It will help to understand what the currently financial climate could mean for you and what support is available.
The government backed Money Advice Service Opens an overlay [Will show a security message first] offers free and unbiased advice.
Similarly, the www.gov.uk Opens an overlay [Will show a security message first] site gives all the details on grants, loans and advice available from the government. If you work for yourself then the self-employed income support scheme has been extended with new applications being received in August. If you are employed then advice on the furlough scheme and what to do if you have been made redundant can be found there too. Whatever you think of the government at the moment it is worth checking out the official guidance rather than just relying on the filter of the news media. Or worse, social media.
Finally, three things we can all do today to keep us moving forward through the financial storm:
- Find out which memberships, subscriptions and monthly payments will allow you to pause payments. Contact as many as possible to find out how payments can be phased to suit your circumstances.
- Super simple budgeting: Write down your current income and expenditure and develop the habit of checking.
- And finally, take care of your mental health. Talk and talk often. Talk to your bank, talk to people you trust. Everyone feels financial insecurity. Everyone. You are not alone. Don't suffer in silence.
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