8 top tips for smashing your lockdown money admin, once and for all
Right now we’re ALL thinking more carefully about our money – how we can earn it, save it and spend less of it! But whether it’s trimming bills or keeping an eye on our debt, how can you get on top of all that dreaded life admin without it getting on top of you?
As a financial blogger and writer, I’ve learned a thing or two about managing money over the years. It’s mainly about setting priorities, being organised, exercising your rights and having a few insiders’ tricks up your sleeve.
So here are my 8 top tips for shoring up your finances and getting to grips with your lockdown money admin, once and for all.
1) Make TIME for your lockdown money admin
It won’t happen on its own: schedule 30 mins once a week or whenever issues start building up. I prefer ‘eating that frog’ first thing. I definitely handle tricky phone calls, like haggling with my mobile provider, better when I’m fresh and starting the day. But other people might prefer tackling their budget in the evening, when work is over, or at the weekend. Work out the right time and day for you.
2) Think short-term, medium-term AND long-term
We all have urgent problems to fix, medium-term challenges to overcome and longer-term goals to achieve. Urgent problems include paying off debts. A medium-term challenge might be cutting bills. A longer term goal might be to have a comfortable retirement. Commit to taking steps in all three areas each week. That way, you’ll find a way to take care of the urgent AND the important.
3) Game your debts: don’t let them game you!
Avoid getting trapped by expensive, pointless debt. How? Start with your ‘real’ take-home pay and aim to spend and save within it. Already in debt? Devise a monthly debt repayment plan and switch to a 0% balance transfer card. But bear in mind that you may only be offered a few months to pay off what you owe if you have a weaker credit score. You’ll have to be very disciplined and cut back to your spending to the bare bone. Once you’ve paid down the card, you can dial your spending back up again – but to a level that’s within your means.
There are much longer fee-free periods on the market from the likes of Bank of Ireland if you have a better credit score. Alternatively, check out a money transfer card if you have an expensive overdraft, such as the one from MBNA that charges no interest for up to 24 months. Use online eligibility calculators to find out what deals you can get. This will help you avoid hard credit checks: too many of those in a short period will damage your credit score.
4) Cut your critical costs
Assess your real usage for essential bills. Then find the deals you deserve – even if you don’t switch. Ring round your home and car insurers, as well as your broadband and mobile networks, and ask what they can do for you. No joy? Move to a new provider, but DON’T just rely on comparison websites as they do not always promote all the best deals. Go direct to insurers and look into brokers if you have a more unusual situation. Also, review all your direct debits and subscriptions once a month and ask if you’re getting full value from them. If not, ditch them. This kind of lockdown money admin could save you hundreds of pounds.
5) Take the money red pill!
For anyone who’s seen The Matrix, you’ll understand what I mean. Taking the red pill means waking up reality, something you can’t unknow. Well, taking the red pill in your finances means becoming aware of what’s actually going on, as opposed to what you think is happening. And the ultimate red pill is you budget. If you’re not in the habit of budgeting, you could use a budgeting app linked to your main bank account. This visually demonstrates where and how you spend all your money. Smartphone-only banks like Monzo and Starling offer great budgeting tools, and Money Dashboard is a helpful app if you’re happy with your current bank. You’ll soon become aware of what you waste and enlightened as to what you really value. Ring-fence a handful of luxuries that make lockdown bearable and cut out or find cheaper substitutes for everything else that doesn’t matter. For instance, Netflix might earn its keep. But a cookpot could be a great investment to make more meals at home in the long run.
6) Save on auto-pilot
Schedule a direct debit for your savings. This can be 10% to start with, then increasing it as your income rises (or recovers). Schedule it to leave your account the day after you’re paid. Use an easy access account to build your ‘argh’ fund: enough to cover your bills for 3 months would be ideal. Premium Bonds from National Savings & Investment offer a (very!) small chance to win cash prizes, but an alright interest rate if you’re not so lucky. Saving into premium bonds so far has netted me a few £25 prizes over the past year. This is getting on for an effective interest rate of 1%. So even if Premium Bond rates have been slashed, they are still ok for an easy access product.
Alternatively, you can take a greater risk through peer to peer lenders. Your money isn’t protected by the Financial Services Compensation Scheme but you can earn 1.5 – 2% with the likes of Ratesetter.
7) Start investing
Take your lockdown money admin to the next level. If you want to make your long-term goals a reality rather than just fantasy, invest £50 a month into a tax-free Isa through a robo adviser, like Moneybox or Nutmeg. Robo advisers (or digital wealth managers) take care of your investing decisions: a good shout if you’re just starting out. But if you want more control and say over your investments, you can manage your ISA yourself through an investing platform like AJ Bell or Hargreaves Lansdown. There are no guarantees with investing. But historically, stocks and shares have performed better than cash in most longer timeframes (i.e. over 5 years). My new book, Own It, will help you understand how to make investing work for you!
8) Find easy side hustles
Finally, maximise your income to make your life easier. By far the simplest (and most eco-friendly) way to earn money from home is to declutter and sell what you don’t want. But you have to nail the pricing and take into account P&P and commission paid to sites and third party payment services, like PayPal. Figure out the right site for your wares. Depop is great for vintage and preloved clothes, particularly if they’re streetwear or more eccentric. I’ve made nearly £200 from the site so far!