Paul Day, a support officer at UK-based charity CABA which supports chartered accountants and their families, provides some advice on managing financial anxiety during the Covid-19 pandemic
Financial wellbeing is about control. Control over your day-to-day decisions and long-term goals. When we lose this sense of control, we find ourselves stifled, caged in, helpless. Anxious thoughts start to cross our mind, such as: Can I pay rent this month? Will I ever be able to buy my first home? Do I have enough money to support my family? Will I have enough money saved to enjoy retirement? Many of us might find ourselves worrying about these questions on a more regular basis now as the world enters a period of economic uncertainty.
Anyone can have these feelings, regardless of income or profession. It’s dangerous to assume that just because someone is earning a high salary, they automatically acquire the status of being financially solvent. For example, Salary Finance’s UK Employers’ Guide to Financial Wellbeing survey found that those earning over £100,000 reported the same level of concern about their personal finances as those earning less than £10,000. This could be because of cash flow or debt challenges which inhibit them from saving, or personal circumstances.
Likewise, being a chartered accountant does not make you immune from the difficulties the economy is facing. Any financial professional, no matter how successful they are, could face redundancy, or seeing their practice lose important clients.
Accepting that these feelings are normal and that you are not alone is the first step towards better financial wellbeing. This will allow you to be kinder to yourself and create space for you to unravel your thoughts and anxieties. Once you have a better understanding of what you’re feeling, you should find it easier to open up and take the first steps towards better financial wellbeing.
Take stock of your finances and create a budget
Before you reach out for help, it’s useful to have an accurate picture of your financial situation.
Knowing your income, expenditure and disposable income once your day-to-day expenses are covered, will give you confidence in your decisions and help you to create a budget. If your partner or spouse usually looks after the finances, be sure to talk the budget through with them, so that you both understand your financial situation.
Tackling any outstanding debts you owe during this time might seem a daunting prospect but it’s okay to ask for help. There are constructive and positive steps you can take to work your way towards becoming debt free – and what’s more, there are plenty of online guides that will walk you through every step of the process.
Know what help is available to you
Your income may be affected while you’re in quarantine, self-isolating, or if your child’s school, your workplace or your business is temporarily closed. In many instances we can provide financial support to get you through the tough times to keep you and your family well. This includes:
- Mortgage and rent support – the UK Government has announced that all mortgage providers must give a three-month ‘holiday’ to those struggling to keep up with payments. For those renters, emergency legislation means that you are protected from being evicted. If you are struggling to pay rent, talk to your landlord to discuss how they might be able to help.
- Interest rate cuts – The Bank of England has cut interest rates from 0.75% to 0.1% as an emergency measure to help reduce the financial impact of COVID-19 on borrowers and businesses. The reduced rates will help anyone who is on a variable rate mortgage or looking to move to a new deal.
- Job security – The Government has said it will pay 80% of wages for employees wherever their employer cannot afford to keep them. Those who are self employed can claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.
- Support for small business – The chancellor has set out a support package for small business such which includes grants, a VAT holiday and a Business Interruption Loan Scheme.