The New Normal

Wednesday 20th May, 2020

Are you ready for whatever comes next? If not, It's time to get ready

The New Normal

While we are still very far from the end of this crisis, the gradual opening up has begun. Some are now returning to work and all of us are wondering what life after the crisis may look like.

Of course there will be practical health and safety issues and continued social distancing for the foreseeable future. For some, things will never return to the way they were as flexible working and working from home will become an embedded part of the new normal.

At this time, we should also start to think seriously about the financial impact of the crisis on our personal and family positions.

Effects on personal finances have been wide ranging and very different. For some of our members, working from home on full pay without the costs of commuting, social events or holidays, finances are a bit healthier than they were before and there’s spare money that they are wondering what to do with.

For others, things have been very different. Whether it’s the lack of overtime that they had been relying on, a spouse or partner who has been furloughed or lost their jobs or those who were self-employed and their business has been forced to close. In these cases, one thing has been very clear, that those who had savings have been far better able to weather this storm than those without.

Some have had to face the fact that without a savings buffer or access to affordable credit, they became very quickly overwhelmed by the financial difficulties caused by the crisis and those hurriedly seeking credit with no certainty of their current or future income levels are storing up a second wave of financial crisis to come. The Credit Union has been working with these members to come to solutions based on their individual circumstances and offering what help we can within regulatory and responsible lending limits. Others have had to learn new skills like taking advice on budgetting and stopping spending.

Whether or not we kept a savings buffer for a rainy day, it’s pouring now and we should all be considering how we handle finances in the new normal.


Savings Buffer

The idea of a savings buffer is not a new one. Advice from many sources including Martin Lewis of has always been that we should build a minimum savings buffer of three months’ living expenses to help us in cases of emergency. The Money Advice Service has been warning for years that 40% of working age people have no savings buffer and were at financial risk. They warned of a “’Live for today’ mindset where UK consumers feel they can’t or won’t prioritise saving because of the scale and variety of commitments and demands in their day-to-day life”

Amongst our own members, over half have savings of less than £1000 and over 600 have savings less than £200. 

It's time to do something about it. Work out our monthly essential expenses and set ourseves a target to save, at least until we have a 3-month buffer against life's unexpected twists and turns.

Warren Buffet famously said “Don’t save what you have left after spending, spend what you have left after saving” The principle is sound. You can only build a savings buffer if you start somewhere and for BAE Systems people that start should be to open a Credit Union account and have a fixed amount taken directly from your payroll every month, to start to build that necessary savings buffer. You can have from £20 up to £300 per month deducted from your payroll and placed directly into your Credit Union.

It’s simple to just set it up and forget it and let it build until you have that buffer in place.

As our members, you already know about this, but so many thousands of your colleagues and friends across the country don’t, and we rely on you to tell them.

Not only would they benefit from savings and simple, affordable credit, but from ownership of their own financial organisation, not-for-profit, but for service of BAE Systems people. Helping each other in times good and bad.

That’s why today, I’m asking you a personal favour. Please consider sharing this information with a work friend who you would like to introduce to the benefits of the Credit Union and help to improve their finances now and for their family’s future.

If you’d like to share the good news with many more people, this link will give you a poster that you could print and post on noticeboards or anywhere else that you have permission to place helpful information for staff. And of course you can use the buttons at the foot of this article to share it on social media.

Together, we can all come out of this better, looking to not-for-profit financial services being a part of our new normal.

Best wishes and stay safe

Mike Barry
First Rate Credit Union









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