When in lock-down mode, did you incorporate any new healthy habits? Maybe exercising more (go you!), eating better, and saving more? Or did you fall into some not-so-great ones (woops!), such as overindulging in food, alcohol, online shopping?
It’s easy to feel like 2020 was one bad news after another! However, there’s a silver lining to this pandemic. For some the pandemic has meant a surprisingly welcome change in spending habits. Let’s dive into the best spending habits to come out of the pandemic, with tips for how you can maintain them in 2021 and beyond.
Keep Good Habits Going
1. Budgeting mindset
Research from the Institute for Fiscal Studies showed that spending levels in the uk fell by almost a quarter during the initial lockdown. Resulting in “forced saving”. The pandemic has changed our attitudes towards spending by:
- removing the opportunity to spend ( no more daily coffee, transport cost etc)
- increasing fear of a recession and increase in unemployment.
Moving forward lets keep the learning of being in thrift mode and not spend on unnecessary items, borrow less, and save more. You might even find you can have zero spend days!
2. Embracing ‘do-it-yourself‘
A “do it yourself” or “DIY” mentality has found its way into the lives of many in the form of hairstyling, cooking, gardening, and home improvement projects. Maybe you can continue doing some of these things you’d usually outsource and save the cash?
3. Home cooking – the new normal
The pandemic forced us into the kitchen, as many of us were unable to or felt unsafe to go to restaurants. Cooking at home is an opportunity to slow down and try new things, as well as being healthier. But it also comes at a lower cost and often creates leftovers that can be stretched much further than restaurant meals. Next stop MasterChef!
4. Learning something new
When stuck at home many have thought it a good time to pick up some new skill or hobby. Today learning couldn’t be easier with online tools like Coursera, Udemy, edX, and Skillshare. You can learn on your own time from anywhere at your own pace. Continuing to invest in your personal growth and learning relevant new skills can help you stay confident, motivate you, and even open up opportunities in the future! Keep it up!
5. Inexpensive Exercising
During lockdown, many of us have focused on fitness to relieve some stress and help re-establish a sense of normalcy. But with gyms closed, we have found “more affordable” ways to exercise with free workout apps or social media videos, outdoor activities like runs and walks, or buying home workout equipment. Many may continue these exercise routines rather than spending money on gym memberships.
Kick bad habits to the curb
1. Boredom shopping
For many, online shopping was an issue long before the pandemic. But now as the days stretch on and every day feels oddly like the last, many are seeking comfort in online boredom shopping. Boredom shopping like other soft addictions, like overwatching Netflix, spending hours on social media, or over-snacking, temporarily scratches an itch. However, they take time, cost money, and numb feelings. They are something lots of us do to fill the void, but they don’t really bring the fulfillment we hoped for.
A simple trick is to press pause on any purchase and assess how you feel ( do I really need it?) in a few days. It helps you be mindful and avoid impulse purchases.
2. Be careful using ‘buy now, pay later’ schemes
‘Buy now, pay later’ (BNPL) services are everywhere! You’ve probably seen these services at the checkout page of your favourite online retailer. BNPL services provide customers with the option to purchase in installments — sometimes without paying anything upfront at all.
Note that BNPL is really just another name for debt since you still have to pay the full price eventually. As a general rule, we would suggest only using BNPL services when you could also afford to buy the purchase in question in cash and the full amount upfront.
There’s nothing wrong with doing some shopping and buying yourself something nice, but there’s a big difference between spending your money to treat yourself and spending money you don’t have. Learn more about BNPL in our freebie.
3. Beware of gamified trading
Gamified trading platforms make trading vey easy and seem like a game. That’s all good if you know what you are doing, but many have started using these types of apps having never traded before. An increase in investing during a pandemic is great, but an increase in short-term manic trading is not. Learn more about investing in our Intro Guide to Investing.
4. Overload of subscriptions
We’ve all been there binge-watching Netflix, ordering food, and shopping on Amazon Prime. We are loaded up with subscriptions that offer us convenience – and while stuck at home why not! But how much convenience and entertainment do you need? Do you really need Netflix, Apple TV, HBO, Sky and Disney+?
Take some time to revise all your subscription services, there may be a few you can drop.
Balancing the good and the not so good
The bottom line is, the pandemic has changed our spending habits. With change, it’s always a good idea to take a moment to reflect and assess the good and not-so-good habits we have encountered. Hopefully, these suggestions help you do just that!
Sources
FCA, FCA highlights continued support for consumers struggling with payments, October 2020