How to Manage Your Money When Furloughed
Being put on furlough is a tough time for all of us in this time of economic uncertainty. Some might assume because of reduced transportation and eating out costs that most on the scheme would save money overall. But that is probably being balanced out by the extra money being spent on bills and in the supermarket. Many will also struggle with reduced income because the furlough scheme only covered 80% of people’s incomes. Therefore, I will be giving you my best tips on how to manage your money when you are furloughed.
Make a Budget
First and foremost, making a budget is critical to better managing your money. Dividing up your spending into 3 categories will help you better contextualise every purchase you make. I suggest dividing it into needs, debts/savings, and wants.
Needs covers all the essentials, like bills, rent/mortgage, council tax, food and insurance coverage. These are absolutely critical to you leading a healthy life with a roof over your head and some food in your stomach. Debts/Savings covers your savings contributions and any repayments that you are in the process of paying off. Think credit cards and other kinds of loans. These are important to keep up with because if you do not that will affect your credit score, which will affect your ability to borrow money in the future.
The wants categories are all the fun stuff. Think takeaways, TV subscriptions like Netflix, and any of those impulse buys that eat away at the financial goals you might have previously set for yourself. Do not get me wrong, entertainment is important when you are stuck at home in lockdown but going online and buying a new massive TV when the one you already have is perfectly fine is not helping your budget at all. If you do need to buy a new gadget or electronic online at least shop around for some deals (https://www.raise.com/coupons/ebay is an example of such) so that the impact on your budget is reduced. In fact, there are many deals out there that can help you to afford the things you want. Some companies even provide bundle deals that mean you can get your internet service provider as well as your favourite TV subscriptions at one monthly cost. This can be a great idea if you’re really struggling to keep to your budget. If you’re interested in learning more, then go and take a look at ATT Bundles.
Review your Direct Debts through Online Banking
Understandably, you could be worried that 80% of your income will not cover everything you usually pay for each month. Therefore, it is smart to look at your direct debts. We all have direct debts we set up in good faith but have not used as much as we would have liked. For example, a gym membership that you signed up for but never ended up using. Maybe you purchased Amazon Prime video but never ended up using it. There could be many others, but the point is that you need to get rid of those if possible.
If you are not using them regularly, then there is little point wasting money on them. You should always double check the Terms & Conditions of your agreement though, it could hurt your credit score if you breach some contracts.
Shop around for Better Utility Deals
Utility providers are constantly in competition with one another. They are always looking for your custom and they will regularly make new enticing offers for brand new customers. So do not be afraid to shop around and find the right deal for what you use. For example, if you pay for the best broadband package going and you find yourself only doing things on the internet that are not super bandwidth dependant like browsing webpages and watching videos in lower qualities then paying for the best package might not be needed.
Be honest with yourself and your usage, you could find that you save a lot of money. Especially as we move into the summer months, where gas and electricity usage should naturally go down. If you do not have a fixed price plan you can save money by negotiating a lower rate. You might even be able to ask for a refund if you have overpaid.
To conclude, in these uncertain times, taking control of your budget should be your priority so you can gain some financial security. With the right assessment of your outgoings you can look to save a sizable amount of money that could make that 20% difference in salary. Every penny will count in these tough times so do your best to stick to your budget.