At the beginning of May, Lynn Beattie, PensionBee customer and personal finance blogger at Mrs Mummypenny and Faith Archer, personal finance journalist and money blogger at Much More With Less, got together to discuss their top tips for managing your finances during lockdown.
Watch the video below and read on to find out the steps they’ve each taken to reduce their household expenses and learn about the areas where you can cut back during the current period of financial uncertainty.
Mortgage and rent payments
You may be able to apply for a mortgage payment holiday, which can help to reduce your outgoings. This is an agreement between you and your mortgage lender, allowing you to reduce or temporarily suspend your mortgage repayments. This option isn’t available for everyone, and these payments won’t just disappear. Moving forward your monthly repayments may increase after the agreed “holiday” period, so it’s important to speak to your lender about the long-term implications and consider your options carefully.
If you’re renting, it may be more difficult to ask for a break from your rent payments. Try speaking to your landlord directly about your options, and see if they can be flexible. Whatever you do, don’t just stop making the payments without consulting them first. It’s possible your landlord may have taken a mortgage holiday themselves, so there could be some wiggle room and you won’t know until you ask. If your income has been affected as a result of Covid-19, you may be entitled to receive Universal Credits, which could help with your living costs. If you have any questions or concerns about keeping up with your mortgage or rental payments, speak to Shelter, who can offer specific guidance.
The best bit of advice from Lynn and Faith regarding your fixed costs (energy, insurance, TV and broadband) is to shop around! Once you’ve been on a contract for more than a year, there’s often a cheaper alternative to be found. Using comparison websites such as Money Supermarket and Compare the Market, will allow you to quickly find out if there’s a better deal available. Lynn frequently checks these sites (every few months!), but also speaks to her current providers to see if there are any savings to be had.
Once you’ve been on a contract for more than a year, there’s often a cheaper alternative
Make sure you’re taking regular meter readings. This gives your provider an accurate representation of what you’re actually using and it may turn out to be less than you’re currently paying for via Direct Debit payments. You’ll be able to get the additional amount refunded, or have it added as credit to your account, which will reduce future payments. Some providers may allow you to defer your payments for a short period too if you’re experiencing financial hardship.
Broadband and TV packages
In line with new legislation, all broadband, TV and phone providers are required to inform you when your contract ends. This is a good reminder to research other options that may save you money, or negotiate with your current provider.
With many of us currently spending more time at home, this may be a good opportunity to change your existing packages to accommodate for your additional needs. For example, Faith has been able to reduce the data on her phone contract, as she’s at home and using more Wifi. Lynn has changed her TV package, as her sons don’t need the sports channels with there being no live sport available. Adjusting your current contract could help to reduce the overall cost, even if it’s only temporarily.
Lynn and Faith kept spending diaries for the first month of lockdown and found that food shopping is their second biggest bill behind mortgage repayments. With their families being at home all day now, they’ve found it harder to reduce this cost with lots of hungry mouths to feed, more often!
Both Lynn and Faith enjoy cooking, and have found that by cooking for themselves they’re not paying someone else to do it for them via ready meals and takeaways. This is the most effective and quickest way of saving money on food. If you can get to them, it’s good to try the cheaper supermarkets and to move away from the more expensive, premium brands when shopping for groceries. Lynn does a big Aldi shop every other week, and is a big fan of the savings to be made from doing so.
Move away from the more expensive, premium brands when shopping for groceries
When it comes to reducing the other costs you may have, going through bank statements and credit card bills can be a great way to see where your money goes. Being strict with yourself and cutting back on things you don’t need will help to improve your cash flow. Faith found that she was paying for a magazine subscription that she can’t use at the moment, and has been able to switch it to a digital-only plan which is cheaper. Similarly to this, you may be able to freeze payments on any gym memberships or subscriptions that you can’t use to save money.