By Ricky Knox, Chief Executive Officer at Tandem Bank Ltd.
Right now everyone around the world is dealing with a situation that is unique and uncertain. The Coronavirus crisis has altered the way millions of people live their daily lives with families unable to see each other, people unable to go out, and businesses having to close their doors.
Our economy has already been affected with the government borrowing, and spending, billions of pounds to try and keep businesses stay afloat and keep unemployment rates as low as possible.
As businesses continue to tighten their purse strings and look to save money however they can this is a time of great uncertainty for many people. More and more are facing the threat of redundancy, furlough or pay cuts every day.
Because of these mounting pressures and the current unpredictability of employment, there has also been an unprecedented change in the way many people value the money they earn… and rightly so. There are however some small but effective ways that we can all make a difference to our finances that won’t dramatically change the way we live.
- Put aside the money you would normally use to travel into work each day. Most of us (although not all – thank you to all of our key workers!) are working from home and therefore not spending the money we would normally use to commute. Don’t spend it on impulse online shopping or signing up to yet another streaming service. Use it to build up your savings instead.
- A lot of us spend money on coffee, a mid morning snack or an afternoon pick me up. Whilst we are not in the office, put the money you would spend on these daily treats aside so you can continue to grow your savings pot.
- Similarly, as we can’t unfortunately go out for drinks or dinner right now, add the money you would spend on these social outings to your rainy day fund.
- With the extra time many of us may have on our hands you should checking if any household bills can be reduced. Switching suppliers for utility, phone and broadband bills is one of the simplest and quickest ways to save money in your home. If you don’t want the headache of leaving one provider and starting again with another, it’s also worth trying to negotiate a better deal with your current provider.
- Make sure you are cancelling unwanted direct debits. If you don’t regularly read your bank statement (which you really should start doing!) it can be easy to miss those direct debits you have forgotten to cancel. By cancelling these you are preventing any unnecessary payments that could otherwise go on for months! Get into the habit of regularly logging into your bank account or an aggregator service to make sure you aren’t paying for services you no longer use or no longer want.
- Make sure you cancel your Sky or BT sports subscription. If you’re paying for these services whilst it may be the last thing you want to hear, with there being no sporting events being broadcast, you’re literally throwing your hard earned money away.
- Another way to spend any new found free time is to research the different types of savings accounts available. This is the best time to read up on the offers available from banks, building societies and fintechs to see who has the best interest rates and what types of accounts they are offering to help you grow your money.
- Using a feature such as Tandem’s Autosavings you can automate small incremental savings that you can afford. Autosavings comprises a set of three rules for putting aside small amounts throughout the month. ‘Round-ups’ will round up any purchases to the nearest pound, with those monies going into an interest bearing savings account. The unique ‘safe to save’ rule uses machine learning to calculate how much you can safely save based on your incomings and outgoings and moves that amount over to the same savings account. In addition there is also the ‘weekly deposit’ feature where you can decide a set amount to save each week.
- If you have a larger deposit already saved up and you’re saving for an event in the future, perhaps a holiday when lockdown is over, you can lock those funds away in a fixed-saver paying a competitive interest rate. Fixed-savers are also useful if you want to split any savings funds you have as they can help you avoid dipping in to them for other day to day spending temptations or requirements.
- Don’t stop saving! The ‘end of the world’ feeling can trigger the need to spend recklessly. Make sure you hold back on your spend temptations and make sure that you are still saving what you can so that you are best prepared to deal with any new and unexpected challenges on your bank balance.
The Coronavirus crisis is undoubtedly going to change the way people think about and value their jobs and money forever. And with the world still trying to figure out what the ‘new normal’ will actually look like, one thing is clear: the innovative services and user friendly interfaces offered by UK fintechs will undoubtedly become an increasingly popular way for people to manage their finances.