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The post lockdown world we're now living in is a strange one. Things have changed, jobs have been lost, people are struggling with finances. 17% of us have used up all of our emergency savings, and almost four in ten people (39%) say that they feel ‘terrified' of the financial impact another lockdown will have [This is based on a survey of 2,000 UK adults run by Opinium between 7th – 10th July 2020, and has been weighted to nationally representative standards]. This is why getting a handle on your money management is so important.
Open Up 2020 Challenge
Together with the Open Up 2020 Challenge, let's discuss some of the areas that you need to consider when you're trying to get a grip on your finances and reveal some top tips too.
The Open Up 2020 Challenge has identified 14 fintech companies who offer solutions to financial problems by using open banking.
Open banking is a secure and convenient way to connect your bank account or accounts with fintech products (usually apps) to help you to take control of your finances. Whether it is to learn about your spending patterns, stash money away or even start investing, there is an open banking app for everything!
Prioritise your spending
One of the first things to do, when starting to look at money management, is to figure out your priorities. What are your prioritises every day, week and month? These might have changed over lockdown and coming out of that time might mean your financial situation is different to what it once was. Perhaps you have more money, maybe you have less. You might have lost your job so you don't have income coming in, yet still have bills to pay.
Prioritise what needs paying first and foremost. This will likely be your rent or mortgage. Putting food on the table. Keeping the lights, heating and water on in your home. Should you have had a reduction in money flowing into your bank account every month, it might be a case of cancelling TV subscriptions and gym memberships.
An app like Cleo can help you to see where your money is going every month. Cleo uses AI (artificial intelligence) to empower its customers, helping them to see where they have been spending money.
Planning what to do and how to do it is important. It might even help you to write it down so you have it in black and white to refer to. Getting a plan in place of how you can make the most of your money is important. Write down exactly how much you are earning every month and exactly how much your bills are costing. You might find out that you're ok and you have a little bit left over after covering everything, but you might be short of money for necessities. This is when you start to shift the supermarket that you shop at to save money, cut back on fitness classes and maybe even look at selling things you no longer use. Part of your plan might even be getting some help.
There are some fantastic apps out there which connect to your bank account and can help you with your money. One of these is Cleo, mentioned above. As well as helping you see see where you have been spending money, Cleo also motivates users to reach their financial goals. This includes spending, budgeting and even switching providers.
Cleo helps you to budget realistically – you can start a new budget on a Monday and budget with the money left over after paying your bills
Cleo will then match your spending into these categories that you have set, and keep you in check.
During the lockdown period Cleo even shared tips about how to make more of your money when staying at home.
Track your spending
Just like planning your finances, you need to keep track of them too. This might be a monthly financial night where you and your partner sit down and work out what you've spent, or perhaps shouldn't have spent. When we keep track, we can do better.
If you find yourself struggling, there are ways to find extra help. One of these is an app called Tully. It's a digital debt adviser which can help those who are struggling with money. There's money coaching, debt advice and it provides online budgeting too. Coming out of lockdown, it can even help the user request payment holidays from the likes of credit card companies, should they need.
Save and invest
Moving out of lockdown is stepping out of the past, towards the future. Savings need to be part of your future in order for you to have financial freedom. There are many ways to save money. From questioning whether you need that takeaway to doing your weekly shop with cash so you can't spend more than your budget. Using technology helps us to save smarter. You can set up automatic transfers so you don't even realise the money is moving from your current account to your savings account the day after payday. How about signing up to Moneybox? This app helps you save and invest your spare change. Every time you buy something, it rounds up your spends to the nearest pound. These extra few pence are then squirrelled away into investment products such as pensions and ISAs, making your financial future that little bit more stable.
Learn what works for you
Education is so important. When we learn what works and indeed what doesn't work, we are wiser. Look at ways where you can cut back your spending, maybe by swapping to cheaper suppliers. Perhaps by cutting out that frothy coffee on the way to work. You will learn where you can save money and where you're unnecessarily spending. You don't have to do all the learning yourself though. Connect the Moneyhub app to your bank account which will help your financial wellness. The app is a money management platform which uses machine learning to categorise financial data. This gives the user actionable insights and allows them to do more with their money. Due to lockdown, the free trial has been extended to six months.
Money management is so important, maybe today more than ever. As we work towards our futures, let's get a handle on our money with all the help we have available.