In the past few months, all our lives have changed. Understandably, focusing on the essentials for our families has been our main priority. The Government and the financial services industry have introduced various measures to help ease financial pressures directly related to Covid-19. We've recorded a webinar to help you understand what help and advice might be available to you.
So, as lockdown eases and things start to return to normal, what should you be doing if you have problem debt?
Don’t ignore a problem
Although credit card companies are likely to defer payments at the moment, this will inevitably mean higher payments in the longer term. If you can, start addressing problem debt now and have a plan in place to tackle debts when payment deferrals end. If you’re not sure where to begin, you can use our simple budget calculator to find out what your position is. It’s quick and easy to use and will give you a snapshot of your financial situation right now.
Create an emergency budget
You should include all payments you’re making. Remember to adjust things like travel and childcare costs if these have reduced at the moment. If you can continue to pay your normal household costs, you should maintain these wherever possible to help keep your payments to a minimum in the coming months.
Prioritise your payments
If your emergency budget shows that you don’t have enough money to cover all your payments, you need to prioritise. You should aim to cover all your essential payments first. These include food, rent or mortgage, council tax, utilities and TV licence costs, and other household expenditure such as hire purchase agreements and insurance payments. When you’re certain you can cover these payments, you can then allocate any money to consumer credit debts like loans and credit cards.
Cancel unnecessary payments
Are you paying unnecessarily for things you don’t actually use? Check your insurance and media packages and cancel any you don’t need.
With interest rates at an all-time low, now might be a good time to consider using any savings you might have to reduce your debt. But remember to leave yourself a financial buffer for emergencies.
If you’re unable to pay for essentials or are worried about your finances, please contact us. Our Money Advice and Guidance team can provide information on your options and how to access the help you need. We can also consider providing financial assistance with priority payments and emergency items to help you get back on your feet.
Apply for help – we’re here for you.