How to spend and save out of lockdown

Lockdown restrictions have been eased and there's so much open once again. But getting straight back into it isn’t necessarily the right thing for your finances. There are some pandemic money matters that need to be addressed before hitting the high street.

Knowing when to splurge

With newly regained freedoms, catching up with friends and family is going to top of the agenda for me, and I’m sure you too. But every meal out, every train journey, every hotel… it all adds up. 

If you don’t want your savings to disappear, I’d recommend creating a post lockdown spending plan to work out just what you can afford to splurge. Whether it’s a lump sum or a regular amount each month, knowing how much you have available will stop spending from getting out of hand.

Prioritise your spending

It’ll be easy to go all-in on available spending opportunities in those early months, but it makes sense to decide where if you’d rather put your cash. For example does it go towards new clothes or towards social activities?

And there’s still some way to go. One area that might still take some time to return are holidays.

If you want to ensure you’ve enough for this, or want to upgrade your normal break to the next level, make sure you partition some of your splurge fund to pay for this.

Dealing with the pressure to spend

Of course it’s easy to say don’t overspend, but emotions can often take over. Pressure from friends and family to meet up and do things, along with your own desires to regain some kind of normalcy, can distract you from the best laid plans.

If there’s a chance that splashing out could cost more than you can afford, please don’t ignore it. Be upfront with everyone and suggest cheaper or free alternatives. 

And not everyone is better off financially due to the pandemic. If you know someone has been furloughed or lost their job, their situation is going to be very different to someone who’s kept working but cut out commuting and other costs.

So please try to bear that in mind when you’re suggesting activities to others.

Ditching the extra expenses

If you’re going to spend in new ways, then you want to make sure this replaces rather than adds to lockdown expenses.

Things like online shopping, takeaways and streaming services all seemed affordable (and hopefully were) when we were stuck at home, but do you need to keep paying for them?

Decide what you haven’t missed

Before the pandemic we would have been victim to spending habits that have now been broken. These could be simple things like getting a posh coffee everyday, through to grabbing a taxi rather than walking.

Have you missed these things? If not, don’t just automatically return to them.

Carry on the lockdown lifestyle

For lots of people there have been some enforced changes which haven’t been too bad. Things like taking the time to cook more from scratch, or taking up new hobbies.

Often these are cheaper than what we’d have done before, meaning sticking with them is a win for your wallet.

Keep on saving

For those who’ve been saving rather than spending in the last year, the challenge will be how to keep this going when you’re suddenly able to do and spend more.

My top tip here is to prioritise your savings by sorting the payment before any extra spending.

To do this, start with your total income for each month, then deduct your essential expenses and bills. Factor in some money for groceries too. Now, what’s left?

Decide just how much of this remaining amount you want to save and set up a standing order from your bank account to a separate savings account the day after payday. This’ll prevent a ‘spending creep’ slowly eroding your savings pot.

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