If you’re worried about money right now, I can absolutely assure you that you’re not alone. This year has been very bumpy and money can be confusing and worrying enough without adding a pandemic to the mix. As usual, we’ve got an expert on hand to help out. Caroline Hughes is CEO of ‘of revolutionary ‘life-planning’ platform Lifetise, a financial wellbeing company that uses technology to help you figure out how to afford your life. She was recently named a rising star of the financial technology industry and is the host of the Money & Me podcast.
1. “I’m worried that I’m going to lose my job due to COVID. I’m actually making quite a few mistakes because I’m so worried about it. How will we be able to cope if I’ve got no money coming in?”
Caroline: Sorry you’re feeling so worried. 2020 has been a rollercoaster and it’s completely reasonable to feel anxious about job security. If you feel you can talk to your boss, then drop them an email telling them you’re worried and it’s affecting your work. Hopefully they can reassure you that your job’s safe.
If the business you work for is struggling, you can ask to be put on furlough. The furlough scheme has been extended to the end of March, so that would allow you to keep your job and still get paid 80% of your salary. You can still work part-time for your employer whilst you’re furloughed, so it’s flexible. Plus there’s another government scheme that kicks in from April that is designed to help you keep your job.
It can also be helpful to work out your back-up plan. For most of us, our anxiety spikes because we picture a worst-case scenario and can’t see a way out of it. The reality is usually that there is a way through and you will be ok.
You can use our free coronavirus money help apps to work out what financial support you could get if you lost your job. Whether that’s redundancy pay, benefits or grants to help you pay your rent or bills.
2. “I am kicking myself as before the pandemic I had no savings…I still don’t. I wouldn’t know where to start to be honest. What’s the best way to begin saving?”
Caroline: People tend to fall into two camps. Those who have a chunk of money left over after they’ve paid rent and bills, but somehow don’t manage to save it. And those who feel they’re living paycheck to paycheck already and there’s no extra cash to put aside.
If you’re in camp one, then you just need to add some automation to your life. Work out what you want to save, then set up a standing order from your bank to pay that amount into a savings account the day after payday. That way it’s gone out of sight before you even notice it.
If you’re in camp two, then try doing a savings’ challenge for a week (or a month). It’s a nice way to give yourself some structure and work out what you can manage to save. Most bank apps now have savings pots, where you can squirrel away the money.
3. “I’m really conscious that things are insecure at the moment, but my partner doesn’t see things in the same way. He spends unnecessarily and it’s so irresponsible. Can I teach him this, or should I just keep our finances separate?”
Caroline: It can be really stressful when you have different ways of approaching money. Often it comes back to childhood and whether you were taught to save or spend; invest in the future, or make the most of now.
If you’re thinking that this is a long-term relationship, then you’re going to need to get (roughly) on the same page financially. It’s usually easiest to do this by working out your shared goals. Something tangible that you want to save for together, like a house or a holiday. Rather than taking on the role of money teacher!
That said, right now things are so turbulent economically that you need to make sure you are financially secure. So my advice would be to keep your finances separate for the time being. Or if you have shared bills, each of you pay into a joint account just the money needed for those bills. Then you keep the rest of your money in a separate account. That way, you’re not taking on any extra responsibility for your partner’s financial stability.
4. “COVID has really kicked my butt. I’ve lost all my clients (I’m freelance) and I’m going to have to start all over again. It’s really knocked my confidence. Is there anything I can do?”
Caroline: So sorry to hear that things have been tough for you. The first thing to check is whether you’re eligible for the third government SEISS grant for self-employed people. That will pay you up to 80% of your profits over 3 months (capped at £7,500 in total). It will give you some breathing space whilst you work out what to do next.
While it’s awful that you’ve lost your clients, you aren’t starting completely from scratch. You already know how to find and win clients, how to price your services, how to deliver great work. You are not a freelance rookie. So much of what makes freelancing stressful at the beginning is that all these things are new and uncomfortable.
You already have all these skills. What you’re having to do is pivot. It’s a cliché word in startups, but it’s what millions of people and companies are doing in 2020. Finding a different way to make money. For the freelancers that we work with, that has meant getting in touch with people in their networks. Finding out what work is available. Taking fixed term employee contracts. Or asking for client referrals. There’s no shame in telling the world you are looking for work. It’s honest and brave and a sign of resilience.
You can listen to Caroline’s Money & Me podcast here.