At the start of 2020, most of us were looking forward to another year of robust growth and economic performance. With a stable government and closure over Brexit, it looked like things were moving forwards, possibly for the better.
But then along came the COVID crisis – the biggest economic storm in British history – and suddenly we all find ourselves in a very different situation.
Most economists hope that this will be a short, sharp shock, and not another Great Depression. Current theory suggests that output will bounce back in the third and fourth quarters, and our jobs and spending patterns return to normal. But, even so, there’s no denying that this crisis has had a profound effect on our ability to make money.
If you had a job before the crisis hit, you’re now on furlough, on eighty per cent of your pay up to the cap (and nothing above that). It means that a lot of people are just coating financially, worrying about what’s going to happen when the money dries out.
Furlough, however, could be the economy’s saving grace. If people continue spending over the summer, it could preserve jobs and keep people in work, encouraging business optimism, and restarting the economy that way. In fact, the recovery could be so swift that we’re completely back to normal next year, barring a second wave.
There’s no denying, however, that the current pandemic has had a deleterious effect on personal finances. Here’s how to get yours back on track.
Keep Your Relationships Strong
Family law solicitors have never been busier since the pandemic got started. Couples are, unfortunately, breaking up at a higher rate than before, partly because of being in the same house all day, and partly because of financial worries.
Keeping your relationships healthy, however, is one of the best things that you can do for your finances. So long as you can cultivate a healthy family life, you can avoid many of the costs associated with separation, such as having to rent a new property.
Provide Value To Your Company When You Return
Companies are going to be looking long and hard about whether they need certain people on their books at all once the crisis abates. To cut costs, they will undoubtedly be looking to lay people off. Workers, therefore, need to focus hard on adding value to their employers when they return and not slacking off, at least for a few weeks. Position yourself that your boss can’t afford to let you go by being irreplaceable.
Supplement Your Income On Furlough
Just because your employer has placed you on furlough, it doesn’t mean that you can’t earn money. In fact, now is the perfect time to practice other skills you might fall back on, should the economy implode for some reason later in the year.
Don’t Put All Your Eggs In One Basket
Finally, don’t plough all your savings into a single investment or fund. Spread it out a little to reduce the risk and protect yourself from outsized losses.