Clare’s 10 tips for taCkling debt

1 Know your numbers

With so much uncertainty ahead, it’s a good time to know exactly where you stand. Make a cup of tea and check the balance of your current account and any credit cards. If you have multiple accounts, you can spread doing this over a couple of days.

2 ...And Keep checKing them

It’s a good habit to check current accounts daily. For credit cards and loans, once or twice a month is enough to keep tabs on interest and repayments. Apps such as Money Dashboard connect all your accounts, which can feel less stressful than logging into multiple banking apps, and shows your net balance so you can see the big picture.

3 c r e At e A ‘coronA budget’

A budget is knowing what’s going on with your money, rather than denying yourself things. Do not ‘crash budget’ and strip all enjoyment from your life – it’s not sustainable. Budgeting isn’t complicated: what’s your income, what are fixed outgoings (eg, mortgage), what are variable expenses (eg, weekly food shop)? Anything left is disposable income, which you can spend or save. Use actual figures rather than rounding up or down; discrepancies add up. If you’re still earning, consider putting money aside for what comes next.

4 d o n ’ t pA n i c i f yo u r Account is no longer in the blAcK

Some people who have never before had to use a credit card or go into their overdraft will have to now, or in the near future, in order to cover living costs. If you’re very anxious about this you’re more at risk of a ‘head-in-the-sand’ mentality. If you have to take on some debt because of this crisis, regard it as something temporary that you can be in control of.

5 cAll your bAnK – they’re not the enemy

If you’re struggling, banks and lenders can help: payment holidays or reductions; freezing or refunding interest; goodwill refunds of fees and charges (they can refund up to 12 months’ worth). Before you call, prepare with account details and passwords, and know what you want to achieve. Don’t feel embarrassed: it’s like talking to your GP – they deal with this stuff all the time. If the person you’re talking to isn’t helpful, say politely: ‘I don’t know if you are quite getting what I’m trying to explain. Is there someone else I could speak to?’

6 recognise emotionAl spending

In lockdown many of us are stuck at home feeling lonely, bored or frustrated. If emotional spending is an issue, before you hit the checkout ask yourself: how am I feeling? Am I trying to fix a bad feeling by buying this? Will buying this solve it? Can I afford it? For example, you’re feeling anxious and looking at a pair of pricy cashmere jogging bottoms. Will buying them help you feel better? Or will you feel the same in a different pair of jogging bottoms? It’s about making considered purchases.

7 bewAre of buy now, pAy l At e r

Be wary of anything that separates the pleasure of buying and the pain of paying, such as Klarna or Paypal credit. For big-ticket items such as new appliances, zero per cent payment plans can be helpful. But if you don’t have £80 for that new top, and have to spread it over three payments, ask yourself if you can afford it – if you default or forget to make payments it can go on your credit file for six years, and you’ll be at risk of a bad credit rating.

8tAlKtoyour children

Older children may be worried about money right now. Try bringing up the subject without telling them what to do. Lead by example – show them how your own ‘corona budget’ works. So many families don’t discuss money, but if you talk openly, it will help them feel comfortable about managing their own finances.

9 consider consulting A finAnciAl Adviser

If you have a clear picture of your finances, a session with an adviser who can help you achieve your financial goals is helpful (but if you don’t know what those goals are, it may not be worth the expense for now). Finding the right adviser is like finding the right therapist: they have different specialities. Some will advise on pensions and hedge funds, whereas you might need a financial coach who helps you change your behaviour around money.

10 seeK help sooner rAtherthAnlAter

StepChange (stepchange.org) and National Debtline (nationaldebtline.org) have free, practical advice about coping financially with coronavirus – including what to do if you can’t pay bills, changes in regulations that might help, and what assistance is available from creditors. They can help you set up a debt management plan, too.