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What lockdown taught us about managing our finances

21/07/2020

As the country yawns, stretches, and staggers out of lockdown, gradually, we’re all beginning to go back to something that resembles normal.

Shops are slinging open their doors to masked-up customers, restaurants and bars are carefully positioning their (socially distanced) table settings – even hairdressers are finally getting their hands on long-unruly lockdown locks.

But before you rush out into this strange new reality with wide eyes and a wider wallet, have a think about the lessons you might have learned about managing your money in lockdown. Here are just a few of the key takeaways that it wouldn’t hurt to incorporate into your new everyday…

Nobody needs that cup of coffee

For those of us who have been in lockdown for a while now, it’s been an opportunity to shed some less-than-sensible spending habits. Like splashing out £2.50 every morning on a Frappuccino to go – just because it’s readily available on the way to the office. Or picking up a shop-bought lunch for a fiver when actually, homemade will do nicely. Those little costs all add up. If you brought your own coffee to work every day, it would add up to a tidy little saving of £564 every year, while a packed lunch could stop you forking over a whopping £1,100 on pre-packed snacks. That’s food for thought.

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Speaking of takeaways…

Many of us have had a bit more time lately to bake, grill, coddle, whisk and sauteé our way through lockdown – remember that week you couldn’t get flour anywhere? Maybe you’ve even developed some fresh culinary skills in your free time. It would be a shame, then, to fall straight back into expensive dining out or pricey ordering in when you have the means to whip up some mean cuisine from the comfort of your own kitchen. Before you pick up the phone and start masterminding that takeaway order or restaurant reservation, consider if your money would be better spent on some wholesome home cooking.

Online financing is perfectly fine

Hibernating from the high street might have persuaded you to give app-based banking a try. And getting used to mobile banking is a great way to keep an eagle eye on your finances. You get a notification for every transaction, so no stray pennies can squeak out of your account. You can check your balance in just a few swipes or taps – so you know there’s enough money available when it’s time for bigger bills to go out. It’s even possible to enjoy better rates with some online banks – because when you don’t have to pay for a brick and mortar branch, you can give a little more back to your customers.

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Saving is for life – not just for lockdown

A recent study by Aviva showed that typical UK households could be spending 29% less in lockdown compared to ‘normal’ times – equal to an average saving of around £171 per week. If you’re one of the two in five people that have been able to squirrel away more money in savings than usual during lockdown, why stop now? If the recent pandemic proves anything, it’s that there’s no such thing as job security, so the only sure-fire way of safeguarding against problem debt and financial catastrophe is popping some extra money in the kitty for a rainy day. Or the financial thunderstorm that continues to loom.

…and budgeting isn’t just for the Chancellor

Maybe lockdown was the first time you’ve had to budget to allow for reduced pay, or perhaps you’ve been crunching numbers all your life and it’s come in handy in recent months? Either way, having – and sticking – to a budget can help you understand your money, and how to cut back, in moments of crisis. But if you’ve been furloughed and you’re going back to full pay, why not try to stick to your pre-lockdown budget – and save the rest? Experts advise having three to six months’ wages saved up in case the worst should happen and you lose your job – so one day in the future

You don’t have to drive all the time

During the first few months of lockdown, we were all encouraged to drive less and only get behind the wheel for essential journeys. And the results were staggering. The skies cleared of air pollution, road rage became but a distant memory, and drivers began noticing the significant amounts they were saving on fuel costs and commuting. What’s more, with gym memberships and health clubs off limits, we all began to see the physical and health benefits of walking and cycling more often. So, before you reach for your car keys, it could be worth asking yourself if you really need to drive for every journey. If the last few months have proved anything, it’s that it’s much better for you (and your money) if you occasionally park up, instead.

If lockdown has rocked your finances, it could be time to speak up. At Creditfix, we have a team of professional, expert financial advisors who can help you if you’ve been left in debt because of the recent crisis. Speak to us today on 0808 253 2541 for free advice.

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