The UK coronavirus lockdown began on 23rd March 2020. The Office for National Statistics (ONS) confirms that between 20th and 30th March, nearly half of UK citizens reported ‘high’ levels of anxiety. That’s over 25 million people.
Those who had already been financially impacted by the pandemic reported 16% higher anxiety on average. The BBC reported that ‘renters and the self-employed were also particularly affected.’
If you have a loved one dealing with financial stress, you might wonder what you can do to help alleviate their worries.
Whether they are unemployed, have been furloughed, or worry about what a future recession could mean for their finances, there are ways you can help.
1. Remind them not to abandon their budget
A natural response to anxiety is to bury our heads in the sand. If a loved one is worried about their incomings and outgoings, they might stop looking at their bank balance altogether. Avoiding the numbers won’t help them add up.
A bank balance might look scary on 80% pay, or no pay at all, but it’s important to brave the figures and put a new, realistic budget in place.
Keeping a note of outgoings and incomings will help your loved one pinpoint the areas where they might have a shortfall.
If this is the case, their first job will be to go through their outgoings and highlight any discretionary, or ‘luxury’ items that can be cancelled. Monthly subscription services or gym membership may have to go in the short term.
Once money has been saved on discretionary items, it will also be important for your loved one to re-examine their spending on essentials. Can they shop smarter by switching brands or planning their shopping with a reduced budget in mind?
Making a list of incomings and outgoings can help a loved one get to grips with their budget, but a simple shopping list is also a great way to prevent overspending.
Planning meals in advance and approaching a monthly shop with an exact list of what they need, ideally with a price listed too, could help a loved one to remain within budget.
2. Point them in the direction of help
Conversations about money aren’t easy. Hiding money worries from partners or extended family will likely only add to the stress and anxiety. If you worry for a loved one, help them to talk about it – either to you or by pointing them in the direction of organisations trained to help.
Debt charity Step Change or Citizens Advice might be able to help, but it’s also crucial a loved one speaks to their bank, loan providers, or credit card companies.
The nature of the coronavirus pandemic has meant that help is available in a way that it might not have been under other circumstances. Make sure that your loved one understands all the help that is available and that they feel confident to use it.
If your loved one is self-employed there is the Income Support Scheme or the deferral of Income Tax to 21st January 2021 for anyone due to make a ‘payment on account’ by 31st July 2020. There are also mortgage holidays or a three-month payment holiday on loans or credit cards.
These could alleviate the pressure in the short-term and make the situation more manageable.
The government coronavirus support website is a good place to start.
3. Offer to help, but only if you can afford to
You might be in a position to help a loved one yourself. That may be as someone to talk to, or by providing financial assistance.
It’s important to think about how the other party will react to the offer of financial help and also be sure that you can afford it.
Whether it’s a one-off gift, a regular income until they can get back on their feet, or a loan, it’s not just a matter of whether you can afford to help now. You’ll need to consider the impact of a gift or loan on your long-term financial plan.
Financial stress can have a significant detrimental impact on both physical and mental wellbeing. By offering a friendly ear, useful advice, and the names of organisations that have the professional training to help, you might be able to alleviate some of the anxiety that a loved one is feeling.
If you think you’d like to offer financial help, speak to us and we can help you formulate a plan that works for all parties, ensuring maximum peace of mind.
Get in touch
If you’d like to discuss any issues around financial stress or the possibility of providing financial support to a loved one, get in touch. Please email info@investmentsense.co.uk or call 0115 933 8433.
