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As coronavirus forced the UK into recession it likely caught few by surprise but that doesn’t mean that its impacts will be felt any less severely. Some people may have been fortunate enough to not experience much hardship from the pandemic and as such, they may now be wondering about how they can now handle this latest downturn.
Ann-Marie Atkins, the Head of Financial Planning at Tilney, commented on what people should be doing now that we know just how badly the country is coping: “Now that the UK is officially in a recession, the first time in 11 years; its high-time people take stock of where they are professionally and financially.
“With over 700,000 people losing their jobs during the lockdown, addressing the security of your current employment is vital.
While this might be a tough question to ask yourself, assessing how vulnerable you are to a possible redundancy and whether you’re financially set up should the unfortunate situation occur will help you prepare and ease your mind.”
“Taking some time to have a financial check for the short-term, look at your cash flow and review your overall cost of living and putting a comprehensive financial plan in place now will reduce any money stress you may be feeling.”
Ann-Marie went on to provide some tips on how people can “recession-proof” their finances.
This advice mainly revolves around managing costs and expenses.
Get a true picture of your outgoings
Understandably, some people may be uncomfortable with examining their finances at the moment but Ann-Marie detailed that it is an essential first step: “The first thing to do is to work out what your current financial situation is and whether it might be changing.
By understanding the impact of the pandemic on both your income and outgoings, you will be in a much better position to draw up a household budget to get through the current period and beyond.”
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Once this potentially painful step is taken, savers can actually move onto some cost cutting.
Identify cost savings and scrap unused subscriptions
Many services in the modern economy are paid for through various subscription models.
This has undoubtedly made certain elements of life smoother but it can be easy to lose track of these subscriptions.
Ann-Marie went on to examine this very 21st century problem: “You’d be surprised just how many people continue to pay subscriptions, standing orders and direct debits without even realising. “Thoroughly reviewing your actual outgoings is an opportunity to identify any further savings.
“Consider where you can make cutbacks to regular costs; so, scrapping any unused subscriptions, finding a cheaper deal on recurring costs like your mobile phone, energy bills or car insurance.
“All of this will accumulate extra money at the end of the month which can go into savings, or be invested, in order to give you greater financial stability during these uncertain times.”
The final tip from Ann-Marie could involve some necessary calculations:
Check your bank balances
Coronavirus still looks to be a long term problem but some of the initial solutions to the issue could be focused on the short term.
As Ann-Marie concluded: “Everyone should endeavour to have some ‘rainy day’ cash savings put away to provide a financial buffer for emergencies and tough times like these.
“As a first step, pay off any loans or credit card debts, if you are able to do so without incurring any prohibitive early repayment penalties.
“Take a long-hard look at how much cash you need to keep readily available and look at ways any excess can be put to use day-to-day.”
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