Plan to restore and keep future finance healthier
While facing the financial fall-out from the effects of the COVID-19 pandemic in 2020 and Christmas, now is the time to deal with overhanging debt and budget ahead for 2021.
The last year had a shattering impact on our national and personal finances. One in four consumers in the UK used a Buy Now, Pay Later credit scheme to pay for Christmas shopping in 2020, totalling £2.3 billion. This equates to 40 per cent of all such purchases in the UK.
The reliance on credit comes as almost nine million Brits find themselves in their worst financial position ever.
New research reveals 70 per cent think their bank doesn’t help them to budget and plan their day to day finances, 19 per cent say they are in a worse financial position than ever, due to COVID-19 and 26 per cent say that both before and after COVID they had zero emergency buffer funds.
Looming negative interest rates leave savers searching for ways to protect and grow spending power.
To help the struggling nation press reset on their finances, budgeting tips are as follows ...
1 Start by understanding just one spending category. Most spending happens in just a few places each month, usually at the same shops or websites. So this can be a great place to start. To spend the same or less next week, set aside your goal amount, pay only from this budget and see how you go.
2 Planning ahead still allows for spontaneity. Paying for Christmas out of one month’s salary, or for a family holiday from a July pay packet? No one has a monthly income to meet this kind of hit, so it’s easy to fall back on debt. Make 2021 the year you plan for the usual big costs and start putting small amounts towards them now. Naming your goals really helps: it’s easier to pay into a Spain 2021 fund than into a nameless pot.
3 Get a money buddy to work with and share goals. Sharing fitness goals works for health and the same
idea works for money too. Save up with close friends and family for holidays and other expenses, or build that emergency fund you’ve been promising to start for a while. If you struggle with impulse spending, share a jar with a friend who doesn’t.
4 Look in all directions before spending. Reflecting on what it is you need and want to spend on helps cut down on spending you may regret. Most people have paid out a large sum for an item they used once then stared at for years before selling it at a loss, giving it away or binning it.
5 Know your own financial foibles. Habits that keep us from living happily ever after with our money can start young. Our money personalities are a combination of impulse spending, apathy, short-term thinking and sheer embarrassment.
Once you understand
the hang-up that’s most responsible for getting in the way of you feeling confident with money, you’re in a better position to tackle it. The above tips are suggested by Mat Megens, CEO of HyperJar. This smart spending app offers account holders who choose to commit money ahead of spending with the tool’s partner brands get a
4.8 per cent Annual Growth Rate on their cash, calculated and added daily. This lockedin money must be spent with the business it is committed to, but there is no time limit and the balance keeps growing for up to 12 months. The app is expanding its partner base to include SMEs, with pubs, cafes, kids’ centres, speciality food shops and restaurants now starting to join. HyperJar can be downloaded from the App Store and Google Play Store. Account holders must be 18 and a UK resident.