5 tips to help you save money if you’ve overspent recently
2 years ago
With more and more restrictions being lifted, more parts of life are opening up to us, which means that we may be spending more money.
Nearly one in three (30%) UK adults are feeling under pressure to spend, as the easing of lockdown restrictions allows more things to reopen.
Some 35% are feeling nervous about potentially having less control over their spending as a result, according to the research from F&C Investment Trust and global investment manager, BMO.
Whether you’re hoping to be more of a social butterfly, or you need to ease yourself back into society – and spending! – more gently, now could be a good time to see if you need a financial reset.
Here are five post-lockdown financial tips from Sasha Evans, personal finance expert at MoneySuperMarket…
1. Reset your budget
Lockdown prompted a change in spending habits for many of us, but another new reality will mean a new budget is needed.
You could split your outgoings into different categories – and set a monthly budget for each one. Fixed outgoings could include mortgage, rent, utilities and any new commuting costs.
Flexible costs include outgoings you can’t live without but those where you could reduce the cost. They would include your essential weekly shop, including food and toiletries, plus personal care such as haircuts. You could include another category of wants, including treats such as eating out and takeaways.
Some banks’ apps will allow you to set up separate pots for different categories, or you could set up separate accounts, and set up regular payments to help you remember to move money around when you get paid.
2. Prioritise your repayments
Many people’s jobs and incomes have been disrupted by multiple lockdowns, which led to some taking agreed payment breaks on mortgages, credit cards or other debt repayments in order to cope.
Payment breaks are short-term solutions. If you have had a payment holiday during the pandemic, make sure you know the facts, including how this will affect your loan repayments going forward, whether the debt has increased and whether it will now take longer to pay it off.
If you have any concerns about your new arrangement, get in touch with your lender as soon as possible. They should offer you tailored support based on your circumstances.
3. Save – but be realistic
According to MoneySuperMarket research, 50% of us managed to save money during lockdown. Some have been able to save more than usual during the lockdowns, as their regular outgoings have been lower than normal.
If you’ve been one of these people, it could be wise to review your savings goals and see what is now realistic, with opportunities for spending increasing and some people potentially facing a rise in commuting costs in the coming weeks and months. Remember it’s still better to be saving a bit less, than to ditch good habits completely.
Don’t despair if you’ve struggled to save. Starting small can help develop a regular habit. Go through your budget and work out an amount you know you can save each month, then shift this money into a savings account on the day you’re paid, or use apps which will automatically put small amounts of money into savings for you.
4. Stick with the good habits, ditch others
Brewing your own coffee, exercising at home, rather than in a gym, or even – if you’re brave – getting a partner to cut you hair could all be habits you want to continue. Or perhaps there are a few spending behaviours during lockdown which you would be better off without. If you’ve been overspending on online shopping or food delivery apps, now might be the time to reduce these habits.
Small changes can also make a big difference. Sticking to a food budget and cooking at home in the week are easy ways to free up more money for a weekend treat.
5. Save on socialising
Catching up with people you haven’t seen for a while doesn’t need to break the bank. Putting aside a fun fund could help you reach saving goals for any big events you’ve got lined up. Also look out for vouchers and discounts on eating out. At this time of year, outdoor picnics are also a great option.
Finally, try to avoid any peer pressure to get out and “live it up” if your funds are limited. You don’t need a new outfit or a full makeover to socialise again, people will simply be pleased to meet up with you.