Having a financial checklist and making sure you have a firm handle on your financial health is always a great stress reliever. It’s more than just knowing what goes in and out of your bank account – having a financial checklist helps you actively budget towards your goals, tackle any potential financial roadblocks, and gives you the opportunity to take control of your money in tough situations and decrease your money worries.
The current coronavirus pandemic has created a great deal of uncertainty. Many of us are practicing social distancing whilst having to worry about job security, income and the health of our friends and family. In these circumstances, money worries can get on top of us – especially if we are worrying alone. This is why we’ve created a financial checklist to help you better manage your finances throughout the next few weeks and beyond.
Take a financial inventory
Creating an inventory during this time is essentially noting down all your financial assets, debts and liabilities. Understanding what you have and what you owe can go a long way to easing your money worries.
Step 1: Write a list of assets, these are things that you own that have monetary value. Things like savings accounts, emergency funds, equity or any other stocks or investments you have made. More information on what an asset is can be found here.
Step 2: Write down a list of your debts, this means everything that you owe. A debt can be in the form of a mortgage, student loan, credit card and more.
Step 3: Finally, take a note of your cash flow, your cash flow is your average outgoings (spend) for the month minus your current income. If you don’t know how to calculate your cash flow we can assist you with this through the cash flow tools in the Portify app.
Calculate and implement an updated budget
Now you have an overview of your present financial health, it’s time to create a new budget. Many of us are facing new and turbulent situations. Your expenses may have increased, your income may have decreased – or perhaps both have happened in quick succession.
In any case, todays circumstances mean now is a good time to sit and think about whether your current budget is still working for you. If you’re not sure how to budget effectively or are looking for a new way to budget, we’ve written a guide comparing some of the most popular methods here.
Manage your larger debts, and pay off small debts
Your top priority is to ensure your loan providers are kept in the loop. For large payments like rent and mortgage, make sure to call your lenders to ask about your options. Various banks are also allowing borrowers to defer mortgage payments for several months due to the COVID-19 outbreak. A list of banks offering this and more advice can be found on the Money Advice Service page here.
We suggest prioritising the repayment of any smaller debts as soon as you can. Think about what small debt you can pay off relatively easily. Crossing a few of these off your list will go a long way to easing your money worries. This will also ensure that your small debts won’t have a negative impact on your financial health later on.
Find out what support you are eligible for
You don’t have to go through tough times alone. During the coronavirus outbreak, the government has introduced new measures to support a range of individuals, from extending the eligibility of Universal Credit and Sick Pay, to introducing new options for businesses to place employees on furlough.
You can find out more information about this on the official government website, alongside your eligibility, here. You can also find more free financial support from MoneySavingExpert here, or Citizens Advice here.
Assess and make new financial goals for your checklist
Your current money worries may affect your short and longer term goals . You may need to assess the viability and timeframes of certain financial goals you may have had. For example, if you had been saving towards your first mortgage, but your cash flow has been affected, it may be worth increasing the timescale for which you had planned to purchase your first house. If your horizon to purchase a house has elongated, consider using services to build your credit score. A better credit score may help you get a cheaper mortgage in the future.
If you had planned to clear off a credit card debt, but now find yourself in a tough situation, checking in with your lender is the best way to move forward. If you have any other money worries related to debt, we’ve got an article all about what your next steps should be here.
Further free resources:
Looking for more resources? In addition to our financial checklist, we’ve listed below some more free guidance on managing your finances during tough times.
- To read more about managing your finances, check out the rest of our blog here.
- For free advice on managing your finances and dealing with debt, check out Citizens Advice here for more.
- For more information on the government assistance you may be entitled to, check out Gov.uk website here.
- Portify: Build Healthy Credit If you are looking for more ways to improve your credit score to get an overdraft look into using a credit building service like Portify. If you are new to the UK, have previous financial difficulties or, have a bad credit score, Portify can help. Portify offers a simple and easy way to build your credit score with Experian, Equifax and TransUnion. Join a community of 100,000+ members who have seen their scores improve by up to 100 points in just three months. We work with all major UK Credit Reference Agencies to build your credit score.