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The 12 Months Pandemic Budget- A Proactive Approach to Resolve Financial Anxiety

The COVID-19 pandemic compromised the economy, as well as the mental and physical well-being of individuals. The global economic breakdown caused disruption in many different ways to businesses worldwide and robbed hardworking employees with their jobs.

Along with the life-threatening illness, the coronavirus pandemic also plagued the world with financial anxiety. Individuals around the globe are still struggling to run their households due to pay cuts and loss of income.

If the global pandemic has affected your finances, it is important to know that you are not alone. You must remember that there is strength in numbers, and due to this powerful number, there are several solutions provided to assist individuals who are struggling to make ends meet. Taking this into consideration, the following guide provides in-depth information for individuals suffering from financial anxiety.

Create a 12-Months Pandemic Budget

Losing your job or receiving a pay-cut are both factors which are out of your control. This sense of losing control can be extremely detrimental to your mental health. Therefore, it is imperative to direct the attention to factors that can be managed. One of these factors is creating a budget.

A pandemic budget should not only be restricted to the essentials. In fact, if you divide your income accordingly, you can even allocate a small portion of your income to an emergency fund. The first thing that you need to do is identify the total income that is generated in your home. This may include the rent money from properties, income from an investment or your partner’s income. Once you identify the aggregate amount, you can divide it the ensuing manner.

Allocate 50 % of your income to the Living Expenses

Of all the areas of spending, the living expenses hike up the most cost. These essentials include the cost of groceries, utility payments, healthcare, broadband, mobile contracts and more. 50% of your overall income should be allocated to the living expenses. With that said, if your income is less than the amount required for the living expenses, you must review your spending and cut costs in areas where it is possible. For instance, getting rid of unnecessary costs, such as paying for a streaming service/subscription.

Distribute 20% to Debt Payments or an Emergency Fund

Similar to the living expenses, paying off your debts should not be neglected, even during the pandemic. However, you can talk to your debt agency/lender to discuss the COVID-related relief options available and strategize a new repayment plan. Taking that into account, 20% of your income can be dedicated to the repayment of debt.

If you are fortunate enough to be free of loan repayments, this amount can be allocated for an emergency fund. The emergency fund can be set aside to cover the loss of income for 3 to 6 months. With 20% of your income going to this fund every month, for the next twelve months, you will be prepared for any unfortunate event.

Dedicate 20% to Voluntary Spending

The pandemic can be hard on your mental health. In order to survive this trying time, it is imperative to take every action that can improve your mental well-being. Considering this, you can dedicate another 20% of your income to voluntary spending. This division includes spending on all the things that bring you joy. For instance, buying snacks or going on a virtual shopping spree may fall in this category.

Set aside 10% to Savings or Retirement Plan

Although there is no vaccine created for the coronavirus, there is no doubt that the global pandemic will end soon (hopefully!). Taking this into account, it is essential to plan for your retirement as well. Set aside 10% of your overall income and allocate it towards your retirement fund. While this amount may not be enough to welcome an early retirement, it can still go a long way.

Support your Business with Community Grants

If you are a business owner, your financial anxiety would largely be attributed to the fact that all of your hard work to build an organisation may go to waste. However, there are community foundations dedicated to providing funding to local businesses and non-profit organisations, so they can continue to operate, without having to invest their personal savings to keep the company afloat. If you are a business owner, or someone struggling to make ends meet, you may apply for the following grants.

National Emergencies Trust (UK): LGBT+ Future Grants Programme

The National Emergencies Trust has launched an LGBT+ Future Grants Programme, which is available for all communities and non-profit organisations dedicated to helping the LGBT+ community. While there is no deadline for the application, it is a requirement for the organisation to distribute all the grants by May 2021. If you are running a non-profit organisation for this community, you do not have to invest your personal savings to give back to the community. You can simply submit an application and benefit from this grant.

Independent Age (UK): Independent Age Grant Fund

The Independent Age Grant Fund offers grants between £5,000 and £15,000. This grant is available for registered charities in the UK who work with senior citizens, which is the age group most affected by the pandemic. The funding from the grant can be used for to provide support and assistance to the elder population. However, organisations eligible for this grant must have an annual income of fewer than £1 million pounds, and they must have a least one paid employee. The last date for application is 11th September 2020.

The Jack and Ada Beattie Foundation (UK): Tons of Help

Tons of Help is a fund introduced by the Jack and Ada Beattie Foundation. It provides financial support to individuals who are victimised by the global pandemic in London and Birmingham. The grant offers £100 to applicants, who require financial assistance make ends meet. Additionally, with this grant, the applicant’s personal information remains protected, and the access to the applicant’s personal details is restricted, even for marketers and donors.

Prince’s Trust and NatWest (UK): The Prince’s Trust and NatWest Enterprise Relief Fund

The Prince’s Trust and NatWest Enterprise Relief Fund has offered a grant for the young entrepreneurs, who are severely impacted by the COVID-19 pandemic. The grant includes £5 million for entrepreneurs falling in the age group of 18 to 30 years old. The fund may be used by businesses suffering from financial turmoil, such as the inability to make payments to the suppliers. Additionally, this grant also comes with one-on-one support and guidance to the applicants, who are willing to take it. If you fall in this age bracket, your business can resume its operations with The Prince’s Trust and NatWest Enterprise Relief Fund.

Rank Foundation (UK): Emergency and Resilience Funds

Rank Foundation’s Emergency and Resilience Funds are focused on assisting businesses affected by the COVID-19 pandemic. The grant provides businesses owners with funds to deal with the immediate operational needs. With the Emergency and Resilience Funds, applicants can avail up to £750, which could be used for purchasing equipment, essential technological tools for the business or memberships. The grant also covers the cash flow, fundraising and the loss of income. With that said, this funding is only available for the RankNet members, however, access to the public is expected to be granted soon.

Lloyds Bank Foundation (England and Wales): COVID Recovery Fund

The Lloyd Bank Foundation has also initiated a COVID recovery fund for small and medium-sized charities. Organisations with an income between £25,000 and £1 million per year are eligible to apply for the unrestricted grants of up to £50,000. This foundation provides assistance to charities that assist individuals with social issues, such as domestic abuse or homelessness. Moreover, the charity also provides a Development Partner to each applicant, in order to assist and guide them to adapt to the new business model.

What can you do if you are self-employed?

Individuals who are self-employed can reduce their financial anxiety by applying for the government-introduced COVID-relief schemes for self-employed individuals. The Coronavirus Self-Employment Income Support scheme offers self-employed individuals the chance to avail the grant, in case their business is severely affected by the pandemic, after 14 July 2020.

In this scheme, the second and final grant (the last date of application is 19 October 2020), ensures that you are provided with 70% of your average monthly trading profits, which are paid out in a single instalment. The grant amount covers the profits for three months and can reach as high as £6,570. Visit gov.uk to learn about your grant amount.

You are eligible for this grant if you are self-employed and working, or if you are a member of a partnership and the business has been severely affected by COVID-19. In addition to this, the following criteria must be met, in order to apply for the Coronavirus Self-Employment Income Support scheme.

  • Your business was trading in the tax year 2018/19
  • You have submitted the Self-Assessment tax return on and before 23 April 2020 for the tax year 2018/19
  • Your business was trading in the tax year 2019/20.
  • Your business intends to trade in the tax year 2020/21

Get FREE Counselling for anxiety from the NHS

Financial anxiety is defined as the worry, fear or concerns that related to your finances. The COVID-19 pandemic has triggered this stress in individuals who are struggling to manage their income.

With that said, anxiety can be both rational and irrational. Even if you are not financially affected by the pandemic, the concern for the future may compel you to worry. This stress is can significantly affect your mental and physical wellbeing. Taking this into consideration, it is imperative to take assistance from a mental health professional and learn ways to resolve the distress caused by your financial concerns. Under the NHS, you can get free psychological therapies.

Eligibility criteria

If you wish to avail the psychological therapies under the NHS, it is imperative to meet their eligibility criteria. The requirements include being registered to a general physician (GP). With that said, you do not need to be referred by a GP, rather, self-referrals are also taken into consideration. The NHS therapy program is valid for individuals above the age of 16. However, you may need to assess their criteria with the service selected.

Types of Psychological Therapies

The NHS covers a wide range of psychological therapies, however, the most common therapeutic plans for dealing with financial anxiety include the following.

  • Cognitive Behavioural Therapy (CBT): Cognitive Behavioural Therapy is the most-used, and the most effective, therapeutic plan for dealing with stress and anxiety. CBT works by helping you change your thoughts or behaviours. According the CBT model, your thoughts, feelings and behaviours are interlinked with one another. Therefore, if you learn to change or restrict your negative automated thoughts, you can take actions that bring a positive result in your life. In return, a positive result would deliver a positive emotion.
    When it comes to resolving financial anxiety, the CBT therapist may teach you ways in which you can manage your negative automated thoughts and take better initiatives to bring a positive change in your life.
  • Guided Self-Help: As the name suggests, guided self-help is a method in which you can work on yourself by participating in a self-help course, which you can attend at your own time and pace. In this therapy, the role of the therapist is limited to designing the course and monitoring your progress. For instance, if your mind is preoccupied with the stress of not being able to pay your bills, the guide self-help therapy would educate you on the ways that you can rid your mind of these thoughts. This method is quite similar to CBT; however, it limits your interaction with the therapist.
  • Counselling for depression and depressive symptoms: Counselling for depression and depressive symptoms include therapeutic plans, which are specially designed for individuals who are experiencing dark and discouraging thoughts. Depression and its symptoms often coincide with financial anxiety, as anxiety can fuel the feelings of hopelessness. If you notice any depressive symptoms in yourself, this type of counselling can help you out.

Ways of taking Assistance

Under the NHS, you are provided with the liberty to take psychological assistance online, or in-person with the selected mental health professional. With that said, the latter is more effective, as it can allow you to develop a rapport with the therapist. You can take therapies in a number of ways, including:

  • Self-help books or courses, exclusively designed for you by a therapist.
  • Therapy on call, or video chat.
  • Online therapy (via call, text messaging or video chatting software programmes).
  • Face-to-face therapy and counselling.
  • Group therapy.

Generate Additional Income from Home

In an anxious state, a person copes in two ways. They either adopt an approach coping strategy (tackling the problem head-on) or they employ an avoidance coping method (repressing the issue).  Approach coping is an effective technique, as you are able to find solutions for the problems provoking financial anxiety.

In the situation of the global pandemic, the most effective way of dealing with financial anxiety is to find other ways of acquiring income. While the coronavirus has shut down numerous industries, there are several sectors that are still flourishing, despite the pandemic. Therefore, you can bring in additional income through the following means.

Write and Publish a Kindle E-book

Amazon Kindle has created a platform for aspiring writers to write and publish their own work, free of charge. If you have a knack for writing, you can easily curate a short story, novel or even a self-help book, and sell it on Amazon. However, you can only earn money through this method if your book is liked by the target audience. Therefore, it is recommended that you write on an in-demand topic.

Earn from filling in Research Surveys

Researchers and marketers are continually on the lookout for individuals who are willing to provide honest information and feedback on products and services. Any individual who meets the researcher’s criteria is welcomed to participate in the surveys. In return for your time and effort, a monetary reward is provided. Some platforms for filling out research surveys, in return for money, include Branded Surveys, Opinion Outpost, Panel Opinion and Survey Junkie.

Earn from Affiliate Marketing

If you are popular on social media, generating an income can be a piece of cake. Affiliate marketing is one of the most convenient methods of earning. A large following on social media platforms, particularly Instagram, Twitter, YouTube or Facebook, can enable you to invite companies that pay you to promote their products. To execute this idea, reach out to marketers who are in search of social media influencers. If your profile aligns with the brand’s image, earning money through affiliate marketing can provide you with some additional income.

Sell Social Media Pages

Another way to earn from home is by creating and selling social media pages. If you run pages with a large following, there are several platforms that can facilitate the sale. Brands are always looking for accounts with followers, so they can promote their products to the target customer base. You can provide the details of your page on Fameswap, Viral Accounts or any other similar platform, and wait for marketers to reach out to you. For this to work, it is essential to have a large and relevant following.

Become a Freelancer

Self-isolation comes with an abundance of time. You can use this time to create a profile on various platforms for freelancers, such as Upwork, Fiverr and Freelancer. If there is a job posting that fits your professional domain, offer a bid, present your portfolio, and earn from the comfort of your home. Freelancing jobs can include content writing, graphic designing, web development and more.

Review Music

You can easily make up to £40 per month by reviewing the music of upcoming bands and artists. ‘Slice the Pie’ is a platform that enables you to generate income by giving honest reviews about bands and aspiring artists. For this to work, you are required to listen to 90 seconds of a song and leave an honest review.

Participate in Competitions

Your competitive spirit can also generate an additional income for you. To win competitions from home, register to participate in virtual competitions. These may include the classics, such as Trivia, or Deal or No Deal, along with contemporary games. However, with this approach, there is no guarantee of winning the prize money. Considering this, you must only sign up for competitions if you are confident in your ability to win.

Sell your Photos

Businesses are always looking to purchase economically priced and attractive images. If you have the talent for taking creative and eye pleasing photos, you can put it to good use. To sell your images, the following platforms can be a hand full:

Conclusion

The COVID-19 pandemic has introduced havoc in everyone’s life. However, if you take a proactive approach to safeguard your mental and physical wellbeing, you can essentially make the best out of an unfortunate situation. Taking a healthy approach to resolving financial anxiety would mean that you are moving forward with the initiative that can protect your business, while also promoting a healthy state of mind.

To get rid of financial anxiety, take a proactive approach and change your spending habits to accommodate for the loss or the potential loss in income. A 12-month pandemic budget would ensure that the living expenses, voluntary expenses, debt-repayments or retirement plan are covered.

Additionally, you can also apply for community grants or self-employment grants for financial support to run the business. However, if you are still stressed out due to your monetary situation, you should definitely consider taking free therapy with the NHS.

However, if you are struggling to make ends meet, due to the coronavirus pandemic, there are methods that enable you to generate an income from the comfort of your home. Use the aforementioned tips and reduce your financial anxiety.

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