The current situation happening in Ireland and around the world is challenging for us all. Trying to navigate social media for accurate information is making things more complicated, increasing anxiety.
You may also be worried about falling into financial difficulties during the restrictions related to the coronavirus pandemic. For example, if your income drops due to coronavirus restrictions or you incur unexpected expenses. You may find you don’t have enough to cover your usual outgoings. You may also be unsure of what you can do to address things or what actions your creditors will take against you?
Below are some steps you can take to ease your anxiety and some useful links to information on your finances.
Try to take some control.
- If you are in work, find out what your employer’s position is on sick pay and annual leave, as you may need to take time off to look after your children. The Government has asked employers, if possible, to continue to pay workers during this period – at least at the jobseeker rate of €203 per week. Employers can then apply for a refund of €203 per week.
- You may be eligible for support from the Department of Employment Affairs and Social Protection (DEASP). DEASP has put in place an emergency COVID-19 Pandemic Unemployment Payment. This payment is available to employees and self-employed people who are unemployed or who have their hours of work reduced during the COVID-19 (coronavirus) pandemic. Check here for more information.
- Develop a short-term budget for a period of 3 months to give yourself a better understanding of money coming in, and money going out and identify any shortfall. You can use the MABS budgeting tool available here or download the budgeting worksheet here.
- When you prepare your budget focus on priorities – food, utilities, accommodation, phone and broadband connectivity, medical care and expenditure on your children or dependants and so on.
- If, after you have developed the 3-month budget you think you are going to have difficulty in making payments or repaying loans, you should contact your creditors by email or phone. It is fine to contact by phone, but you should always follow up in writing.
- Creditors are aware that COVID-19 is going to impact on people’s income. They should be willing to work with you to reschedule over the short-term, where this is necessary based on what you can afford to pay; but it’s crucial to get in touch early.
- If possible, try to avoid further borrowings as a solution to a drop in income and avoid high-cost credit.
Which outgoings should I prioritise?
If your income drops due to coronavirus, you may find this money isn’t enough to cover your usual outgoings. Here are some steps you can take:
1. Focus on priority living costs –
You should prioritise spending on food, medical care and utilities to prioritise your health and wellbeing.
- Food: Some recipes to plan and get the best value for your money, some ideas can be found here. With children at home it might be a nice time to cook together and the recipes are easy to follow.
- Utilities: You should continue to make payments on utilities such as gas and electricity to avoid disconnection. If you are eligible and not already on the vulnerable customers’ register, you should register now by contacting your supplier.
2. Make a list of all your debts and bills –
Your debts might include, for example:
- Mortgage or rent
- Credit card
- Overdrafts
- Loans
- Hire purchase payments
- Utilities such as phone or internet bills
- Payments to Revenue
Make a list of who you owe money to and how much your debts or bills are each month. Make sure you can pay for your priority living costs before you prioritise payments of other bills and debts. You can download spending diaries here to help you with this, the MABS Budgeting App or just use a good old pen and page.
3. Prioritise your payments –
Work out which debts you need to pay first after prioritising food, medical and utility costs. Some debts are more important than others.
- Mortgage payments: if possible, you should continue to pay your mortgage. If you don’t think you can make the full repayment due to a drop in income you should contact your lender as soon as possible. You should maintain the maximum payment you can afford towards your mortgage.
- Rent payments: this is a priority because you want to maintain payments in support of your tenancy. If you are having problems meeting your rent payments, you can contact Threshold. This national housing charity provides information and advice to people in private rented housing.
4. Contact your creditors
If you feel like you might fall behind on your payments. They may be willing to be flexible or offer support to try to prevent you from falling into debt.
Managing Financial Stress
While it’s unrealistic to think we can eliminate stress at this time altogether, there are ways to reduce the impact on your anxiety and stress levels.
Feeling over-stressed can make it difficult to take steps to deal with financial problems. Here are some of the issues that can cause someone to do nothing:
- Seeing the problem as too big to solve
- Trying to solve all the problems at once
- Not sharing the problem or not seeking advice
- Blaming others for our situation
- Letting stress affect our judgment
Some small steps you can take to help your financial stress during this challenging global time.
- Do something about small, tackling each tiny piece of a bigger problem
- Ask for help from family or friends and begin to talk about the situation. Take one step at a time –and remember, it’s good to talk. A lot of people will be feeling the same worries at the moment; we are all in this together.
- Look after your health. Make sure you’re eating properly and use exercise to reduce symptoms of stress. Get out and get fresh air, ensuring that you follow HSE guidelines on social distancing.
The MABS Service
While the MABS Service is not providing face to face supports at this time, the service continues to support people who are anxious about their finances, paying bills and mortgage and loan repayments at this time.
We are working to support people in other ways, by phone, email or by post. You can find the contact details for your local MABS office here.
For people might not be ready to make contact with the service and want to take some steps themselves, the MABS website has many useful guides and information leaflets that also might be of help to you.
We are keeping our website as up to date as possible with details on any new announcements and we will only share information from trusted sources.