If there is one thing you can expect, it’s the unexpected. From boiler failures and car accidents to redundancy or health issues, we are never too far from something we weren’t fully – or financially – expecting. The impact of the unexpected on your finances can take a real toll, with many people experiencing personal finance issues as a result. The current Coronavirus situation in the UK and worldwide is proof that things can change very quickly with an unexpected event. With the interest rate being lowered to 0.25% by the Bank of England in response to the current public health issue, many will be looking to their personal finance issues. How will this affect your bills? With news that Royal Bank of Scotland, which includes Natwest, is to offer a three-month payment holiday to those impacted by Coronavirus, businesses are looking at ways to prepare for money management issues. So how can you prepare for the unexpected now and in the future?
How to Prepare for Unexpected Bills
The current global health crisis has raised anxieties around money; what happens if you have to self-isolate and can’t work? In the US, it is reported almost a quarter of working Americans do not have sick paid leave, with a further 54% in general not being financially prepared for a health issue of this size.Here in the UK, things are more positive when it comes to sick pay, with the announcement that statutory sick pay will be available from the first day of self-isolating, instead of the usual four-day threshold. This is, of course, a temporary measure due to current circumstances. Aside from the impact of the Coronavirus, unexpected bills can still appear from other avenues. The question is, do you have the money to cover them?
Many people may turn to short term loans to help them get through a cash flow problem. The reasons for this can vary, but most of the time it’s because savings are low or are not immediately available – such as if money is tied up in a cash ISA for example. Having the facility to borrow money online and, if approved, seeing the funds appear directly into your bank account, is a convenient solution. However, short term lending may not always be the best option when you need to pay for an emergency expense. This is due to higher rates of interest, if the loan is taken out for too long or not managed properly. Planning ahead just in case money issues arise will help you much more in the long-term. In the current climate, the government have announced guaranteed loans for British businesses totalling £330 billion, the majority of this for large companies whilst £1 billion will be for smaller ones.This is in aid of ensuring the smooth running of businesses during uncertain economic times.
Many payday loans cover unexpected expenses until your next salary date. However, consumers should consider all options before choosing to have this form of borrowing. In times of crisis, it’s best to not make any hasty decisions, especially when it comes to your finances. This way you can choose the best option for you rather than the first that you see. It’s not just individuals who have had to turn to emergency short term loans, with even businesses in need of this form of funding.UK banks, including Barclays and Santander, will be providing emergency loans to those business suffering from financial strain due to the current climate.
How Can I Prepare to be Financially Self Reliant?
Even if you cannot afford to save large sums straight away, getting into the habit of regularly saving will help alleviate strain when you need to pay for something quickly. With all the benefits of short term lending, it’s still better to have your own money ready to pay. The good news is that if you then don’t have a financial issue to pay for, you have savings that can go towards a deposit on a house, a new car or weekend away. The goal of many people is to become financially self-reliant. However, with the interest rate cuts, this has a knock-on effect on savers. If you have an ISA or savings account, the average long-term fixed rates are at their lowest level since May 2017. Add to this that a reported half of over 55s have no form of savings, a healthy amount of savings may take some time to build.
The intention to save is there, with 91% of people planning to save more than they did the previous year. However, 40% of UK workers have said lacklustre earnings are the main reason for not doing so.
Making small changes is one thing you can do very quickly, such as spending less on unnecessary luxury items like takeaway food or drink for example. Having insurance is another way to help you in an emergency. From illness cover, life insurance or home and contents insurance, these can all help cover the unexpected so that you don’t have to pay out too much to resolve an issue.
Whether you need short term lending, have the savings to cover it, or the insurance to alleviate the financial strain, being prepared is the key. Here at Wizzcash, we can help you in times where there are no other options, with short term lending products designed to makes things easier in the event of a financial emergency. If you need any further information, please browse the website, or contact us directly to speak to our team.