Budgeting for coronavirus lockdown – top tips from a money expert

Money expert Martyn James has some advice for those struggling to get a grip on their finances durin

Money expert Martyn James has some advice for those struggling to get a grip on their finances during the COVID-19 lockdown Picture: Getty Images/iStockphoto - Credit: Archant

With hospitality staff, freelancers and gig economy workers all the way to homeowners and high-street brands affected by the coronavirus lockdown, money expert Martyn James offers advice for how to budget during the pandemic.

Coronavirus has disrupted practically every aspect of British life – especially economics. The way the economy operated even one week ago has been totally dismantled, and with social distancing measures and lockdown undermining the existing labour market, many are wondering what this means for their finances.

Martyn James is Head of Media for Resolver, the UK’s largest free complaints website, an online tool that educates consumers on complaints procedures and helps them interact with businesses to resolve disputes. Martyn also works freelance as an independent consumer rights and money expert as the in-house consultant for BBC’s Rip Off Britain, in addition to appearances on ITV, Channel 5 and various national radio stations.

“Even with 20 years of experience in this sector, I have never encountered a situation like this,” Martyn says. “It is truly unprecedented. The pandemic and resulting government advice affect absolutely everybody – financially or otherwise.”

With the long-term economic consequences of the coronavirus lockdown still unknown, Martyn says people can begin to prepare themselves and use the time spent housebound to take back control over their finances with a budget.

“Budgeting is essential, particularly at this moment. For the last decade, many have struggled from month to month and we often don’t know the full scope of what is going in and out of our accounts every day. As a result, the amount of breathing space for missing payments is relatively small. What’s more, the advent of one-click payments and contactless means we’re probably less in control than ever.

“My advice is to sit down and relax with a cup of tea, a beer or a glass of wine. Set aside half an hour and go through payments in and payments out. There are plenty of apps and programmes available online, but a simple spreadsheet or even a piece of paper will do the job.

“The first few minutes will likely be horrible. Don’t worry. This is about control: you can significantly reduce monthly outgoings simply by knowing where your money is going. After you know what you’re looking at and whether you have enough money, you can start negotiating with businesses you owe money to if you cannot afford payments.

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“I realise it’s difficult to bring yourself to sit down and do a budget if you are worried about your finances. People will be concerned about where money is going to come from right now and nobody wants to look at a spreadsheet that proves they are in trouble. But knowing you are in trouble and that you can get help is vital. And there is a lot of help out there.”

Martyn recommends a charity called Step Change that helps people with debt management plans.

“If you are struggling financially, Step Change will contact businesses you owe money to and negotiate smaller payments. It is a free service and can help if bills are getting on top of you.”

Banks, councils and credit providers have procedures for dealing with people in financial need, while energy companies have suspended debt procedures and regulators are doing what they can to help people.

“Speak up to let them know you’re struggling. And the same goes with landlords and council officers.”

The UK Government has introduced initiatives to assist financially, including reducing waiting times on Universal Credit and offering mortgage payment holidays of up to three months.

“If you are worried that you will not be able to meet your mortgage payments, this holiday is for you. Don’t assume it will happen automatically. If you need it, you need to apply for it. You can apply online and explain your situation. If you feel you are not treated fairly, remember that you can make a complaint and go to the financial ombudsman.

“We expect that measures for the self-employed, as well as the five million small business owners in the UK will be announced soon.”

And with everyone impacted by this unprecedented global event, Martyn is aware of both the darkness and the light.

“In many ways it is a great democratiser, as it impacts all demographics. Regardless of how much money you have, there is a huge economic impact on everyone. We know this is true due to the unprecedented levels of state aid being introduced. The sad reality is that at some point there will be a price we will have to pay for all this, but at least we are all in it together – worldwide!

“We have been overwhelmed by people getting in touch to ask how they can help others. There is a great deal of humanity going on out there, with people getting to know their neighbours and offering support. There are certainly reasons to be optimistic.”

For useful resources related to coronavirus financial support, please visit the Resolver website.