Protect yourself from the financial upheaval
The last few weeks haven’t exactly been great for people struggling to make ends meet. I know from your messages and emails that saving cash is a big concern – so here are a few things you can do right now to get back on top of your finances.
The budgeting basics
Take a deep breath, turn on the computer or grab a notepad and have a look at your bank accounts. But set yourself a time limit of no more than 30 minutes. Just getting started is the most important thing.
You can download free apps, watch flashy guides on YouTube or check out lifestyle blogs from ridiculously organised people, but budgeting is best when it’s basic – a simple spreadsheet is all you need or a blank piece of paper.
If you have online banking, you can get a list of direct debits and standing orders with one or two clicks. List when your regular payments are due and total up the cost, then compare it to what’s coming in.
In a separate column, include things that you pay as you go, like the food shop, travel and lifestyle spending such as entertainments and takeouts.
Get some cash back
control
Go back 13 months through your bank statements and note down anything that you don’t recognise.
Many people are spending hundreds, if not thousands of pounds each year on sneaky annual debits for things they neither wanted nor needed. These might be free trials for goods or services you signed up to, or more obvious things, like Amazon Prime or iCloud storage.
Why 13 months? Many businesses sign you up to annual payments that might have slipped under your radar. So go back a year and overlap by an extra month and you should spot everything.
Ask your bank to cancel anything you don’t want or need straight away – and claim back the money if you didn’t authorise the payments.
You can dispute unauthorised transactions through your bank or card provider or take it up directly with the firm that’s debited you – it’s up to them to prove you said they could take the cash.
Contact your creditors
The rules about financial difficulties are clear. If you’re struggling to meet your financial commitments, ask the business for help. They should come up with solutions for you to buy some time while you get back on your feet again. They should also consider suspending interest and charges for a short period if it’s making your situation worse. This doesn’t mean money you’ve spent will be refunded, but it does mean that money you’ve been charged on top might be refunded if there’s a good reason for doing so.
Loan and credit payment holidays are available too, so ask and explain if you’re struggling.
Mortgage and loan holidays buy you a bit of time to regain control of your finances but bear in mind the money you owe just gets tacked on to the end of the mortgage or loan period and extra interest may still apply.
Get a (free) plan.
If your financial difficulties look like they might be longer term, speak to a free service like StepChange, a charity set up to help people get back on top of their finances.
They’ll contact your creditors for you and negotiate payments you can afford. It’s not easy, but it’s a solution. Never pay for a debt management service – there are free options out there.
And bankruptcy and Individual Voluntary Arrangements (IVAs) are very much a final option. Don’t go there unless you are all out of other solutions.
■ You can still switch to save money too – check out Resolver’s new free switching services, get help and advice and contact a business or organisation to get complaint sorted out: resolver.co.uk