Well, 2020 was one hell of a year wasn’t it?
We were locked down, placed in tiers and generally held back – and for many people their finances were very stretched. It was a bit of a financial lottery: some people went to work as normal and got paid as normal: some were furloughed and got paid less and some lost their jobs, and their incomes completely. You never know what’s going to happen and when you’re going to have to make money go further or when you’re going to need some spare cash.
So, what can we do to protect ourselves better and to build up some spare funds to use in emergencies or to save or invest as we want?
- Get real and get aware! Make sure you know what money you have and where it goes. Knowledge helps enormously and it’s only when you start to control your financial flows can you start to build up some buffer and savings for those rainy – or pandemic – days. The start of a new year is the perfect time to start this review.
- Challenge all your outgoings: make them as low as possible: use comparison web sites to get better deals on all household expenditure and make sure you hold onto any savings.
- Manage your debt and make sure you make all necessary payments but see if there’s a better deal and a lower interest rate available on all your borrowings.
- Make sure you hide any spare money from your ‘spending self’! We can be our own worse enemy with money and even if we do manage to save some we can also soon spend it. If the pandemic taught us anything about money it is that we need some spare funds for emergencies that we can’t predict.
- Look into some savings options: these can be long term or easy access if you think you’ll need the money again soon, but you’ll get some interest and you’ll also see the benefit – and relief – of having some spare money available.
What about 2021?
- The economy will return to normal, recover and start to grow again and this will give confidence to the government and to businesses who will start to employ again. Unemployment rates will fall, and although jobs may be different, there will be jobs!
- Prices of some goods are likely to rise in the new year as a result of the Brexit deal or lack of it. This will be short lived but we should be prepared to make different purchasing choices to get better prices on products grown or made in the UK or in non EU countries. You’ll know what they are because they’ll be cheaper!
- Short term debt and longer term debt like mortgages will get easier to get as finance providers get back to their business reality, which is they want to lend you money! It’s likely that mortgage deposits will get smaller and that better deals will be available.
- If you have lost your job, it could be a good time to start your own business and be in control of your own destiny.
- Expect all sectors of the tourist and leisure industries to boom as people go on holiday, go out for meals with friends and party like they’ve never partied before!
2020 was a terrible year and many people suffered financially as a result. We don’t know when or if another pandemic is coming – or what other crises we might meet – but get yourself into a better position to cope next time and protect your family with some decent money education and some family financial controls.
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