I’ve lived in London for nearly six years, renting with friends and working in PR, which has only ever paid just enough for me to get by, consistently spending the entirety of my pay cheque every month.
After a four-year stint at my previous agency, I moved to a new company mid-February and just four weeks in, Covid-19 hit and I was made redundant with a one week notice period (and obviously went into complete turmoil).
Leila* is a 28-year-old PR manager who started a new job at an agency in London just a few weeks before lockdown, was made redundant and then put on furlough until July with no job security at the end of it. Here’s how she’s managing her finances…
I was exceptionally lucky that my flat tenancy was coming to an end in April and I hadn’t yet signed on a new place, so without a steady pay cheque and so much uncertainty in the air, my only option was to move back in with my parents in the Midlands before lockdown started (fortunately they were delighted to have me back). I honestly don’t know what I would have done if I was still tied in to my flat and liable for £900+ per month of rent!
About a week into being home, the government announced the furlough scheme and I got in touch with the new agency, and they were happy to put me on furlough as an extension of my notice period but with no security of a role to come back to.
Current account: £175
Savings account: £1,000
Monthly wage: £2,100
Monthly wage post Covid-19: £1,600 on the furlough scheme, but currently uncertain as to whether this will continue after the end of July
Any other incoming payments: Nope
Rent: £800 per month in London
Bills: £100 per month in London
Other: £120ish on travel, £80 gym membership, £10 Netflix, £10 Spotify, £10 beauty box subscription.
Splurges: Like many who lived in London, I’m guilty of spending an extortionate amount of my salary on dinners and drinks out. I usually have dinner out around three times a week and then brunches and drinks at the weekend. I’m also terrible and meal prep so I usually end up spending at least £5 a day on sub-par Pret sandwich. I don’t spend too much on clothes, but I live for weekends away and holidays, so a huge chunk of my money often goes on flights and Airbnbs
Weekly budget: It varies so much from week to week that I have never properly budgeted, but that is definitely about to change…
What I spent this month: With the last of my London rent payments out of the way, for the first time in 10 years I didn’t have any rent to pay! I did however spend around £200 on gym gear and equipment in an attempt to encourage the home workouts.
What I was left with: £1,400 of furlough money, most of which has gone straight into a savings account (thank you, Rishi).
Credit card: I have an AmEx which I’m exceptionally paranoid about, so I always ensure that this is paid off on time every month.
Other: Now that I’m back in the sticks for the foreseeable future, I’ll definitely need to buy a car, which I’m looking to do on finance so that will be a new monthly outgoing.
MY MONEY THOUGHTS
What I want to save for: A house is simply out of the question for now, but just to have a small stash in the bank for a rainy day would be ideal since I’ve never managed to have any savings.
How I want to plan my money for the future: I’d love to buy a house at some point, but I’m not sure that ‘living my best life’ in London and working PR is going to get me there sadly.
My worst money habit: Getting Ubers everywhere “because it’s only a few more £ than the tube”, booking too many spontaneous weekends away, buying the equivalent number of rounds as my banker friends on nights out.
My biggest money worry: My furlough ends in a couple of weeks, so the uncertainty of when I’ll be able to find my next full-time job on the salary I’d worked for years to get to is unnerving
Current money mood: ? ? ?
WHAT OUR EXPERT SAYS
Seek support It’s fantastic to hear that your previous employer was able to put you on furlough but the situation sucks and feeling worried about your financial future is a real burden. Rather than becoming overwhelmed by what’s ahead, your first step should be securing your financial present. If you’re in the UK, on a low income or out of work, over 18 and you and your partner have £16,000 or less in savings, you’re eligible for Universal Credit. This should provide you with at least £409.89 per month. You can apply at gov.uk/apply-universal-credit.
Do you need a car? Before plunging into the murky waters of car finance (please proceed with caution), evaluate whether this is a decision that needs to be made right now. Understandably, you want to secure some independence but until you’re very sure that living with your parents is a near certainty for the next year or so, hit pause on the new wheels. Instead, look at alternatives; could you get insured on your parents’ car? What are your options for public transport?
A budget that doesn’t suck You’re about to develop a newfound love for the budget. The method I come back to is the adapted 50:30:20 method, which splits up your spending into the following respective categories: needs (food), wants (weekend brunches) and goals (saving for an emergency fund). Evaluate what you’re currently spending while living at home, consider what can be cut and work out realistic target percentages for each category.
Make a plan Once you’ve got your budget up and running and a degree of short term security, you should be in a better place to take stock and develop your plan of action. It’s not easy but try to re-frame your current situation and see the opportunities. For instance, if PR isn’t ticking your boxes and you’d like to move towards a career which might earn you more dolla, this is your moment. With the security of your parents’ home to come back to, take the course you never had time for, email that person with the really cool job and ask for their advice, polish your CV and go after what it is you really want.
Eleanor Levy from workplace pensions provider NOW: Pensions:
Being on furlough can be a worrying time and put a strain on your finances. The good news is that if you have a salary sacrifice agreement and you’ve been furloughed under the Coronavirus Job Retention Scheme, your employer is still required to make pension contribution payments and follow their usual pension arrangements.
Judging by your age and income, you should be auto enrolled into your workplace pension scheme. If you can continue to make payments into your workplace pension, your future self will thank you for doing so. Any breaks in contributions now can make a significant difference in income by the time you reach retirement age.
While you are on furlough, it is an ideal time to review your finances and set new savings goals. The earlier you start saving, the easier it will be for you to accumulate a significant level of pension savings and when you land your next role, you should consider paying more than the default contribution % into your pension to compensate for any breaks between jobs.