2020 has been a tough year for many contractors. Coronavirus, job uncertainty and little help from the UK Government has led to tough times for many. With news of a potential vaccine with 90% protection on the horizon, there could be light at the end of the tunnel, but money worries are still among the top issues facing contractors. In our upcoming Contractor Survey, 85% of independent professionals reported that they have worked on less contracts in the past 12 months, when compared to the previous year.
This week is Talk Money Week and it feels more pertinent than ever. Our financial health has taken a real hit over the past year, and how we deal with this now will affect us for years to come. To celebrate Talk Money Week, and to support you and your financial wellbeing, we’ve explored 5 ways to improve your financial wellbeing as a contractor. Take a look below.
Talk Money Week aims to create an open dialogue between friends, family, colleagues, financial institutions and financial charities. According to a recent survey conducted by Talk Money Week, despite COVID-19 affecting our finances, 47 million UK adults – that’s 9 in 10 – don’t find it any easier to talk about money, or don’t even discuss it at all.
This is significant. Known as the ‘Great Wealth Transfer’ $15.4 trillion worth of assets is expected to be passed down the generations in the 2020s. On the other end of the scale, UK household debt rose by £119 billion in the two years to March 2018 (an increase of 11%).
Talking about our financial wellbeing is important and something that – across society – we don’t do enough of.
#Top tip 1 – If you can, start by chatting with your friends and family. It can feel like an awkward conversation to broach, but it really can make a difference in with your financial wellbeing. If you’re not ready to take this step yet, then you can speak with The Money Advice Service over the phone, live chat or even via WhatsApp.
Save, save, save
Ok, we all know we should do it, but that extra streaming subscription or Deliveroo order always seems to get in the way. This is not uncommon. According to NatWest, over half of their customers aren’t putting any money aside each month.
Try using the 50-30-20 rule. This is where you spend 50% of your income on essentials, 30% on non-essentials and 20% on saving. This might not work for everybody, your necessities might be more or less than 50%, for example, but it is a good rule of thumb to try and stick to.
- Essentials (50%): Rent/mortgage repayments, groceries, insurance, car and utility bills
- Non-essentials (30%): Netflix, Amazon Prime, meals out, new clothes
- Saving/investing/paying off debt (20%): Cash ISAs, investment accounts, credit card bills, pensions
#Top tip 2 – Payday, save day. Make a separate savings account and set up a standing order from your main bank account on the day after payday. Setting a goal and naming the account (i.e ‘Wedding Fund’) can also help.
Feeling the pinch? Get some help
We can all get into financial difficulties from time to time. Debts can slowly mount up, but it’s never too late to reverse the trend. StepChange is a debt charity who help individuals who are in debt, work out a plan on how to repay them. They’re experts in helping those with money worries and have the latest information when it comes to changes in legislation.
Switch it up
Switching providers that offer you a product or service, can do wonders for your finances. According to Money Saving Expert, many people could save up to £200 per year by just switching energy supplier.
It’s not only the case for gas and electricity providers – switching your insurance, banks, internet and phone provider and even where you do the weekly shop, can have a positive effect on your bank balance.
#Top tip 3 – Money Saving Expert has advice on switching suppliers. They offer extensive free and impartial advice – so you know you’re in safe hands when trying to make your money work for you.
Claim tax relief
Many people are unaware of what tax relief they can claim back. From working from home allowances to trivial benefits, there is a whole host of different taxes that you may be able to claim back on.
Here at Nixon Williams, we’re committed to making sure our clients pay the right level of tax. If you want a free no-obligation call, fill out your information below and a member of the team will be in touch.