Learning from lockdown: cut the wasteful spending
There's a lot that you can't control, count on or predict. But one thing you are in control of is the choices you make about how you spend your money.
There's a lot that you can't control, count on or predict. But one thing you are in control of is the choices you make about how you spend your money.
With all the restrictions of lockdown, it's likely that your spending habits have changed; it may also have highlighted the difference between your needs and your wants. And you may have been surprised by how much you saved by cutting out certain expenses – this is a good opportunity to consider adopting new habits.
You don’t have to maintain strict lockdown-level spending forever, but this is a good time to be selective about what habits you fall back into to avoid wasteful spending. Spend on the things that really matter to you, but try to save as much as you can on the rest.
Here are 4 ways to tackle your spending:
Lockdown may have made you aware of the things you can live without (and the things you really don’t want to!). It may also leave you feeling more grateful for what you already have, and more aware of it too.
Make a list of all the items and services you’ve gone without during lockdown. What can you cut out permanently? What will you return to, but spend less on (be specific about this) than you did before? And what are the things you can’t wait to prioritise again?
To see where your money goes, you need a clear view of your expenses. It could also show you which spending habits you need to change, so get familiar with your bank statements. Work through your bank and credit card statements line by line. Is there anything you’re paying for that you’re not using? Or that isn’t adding much value? Look at every expense and ask yourself:
Think about the ways your lifestyle may have changed – possibly forever – and whether all the items and services you had before are still necessary.
During lockdown, many car insurance providers lowered premiums to reflect people’s reduced driving and reduction in risk and claims as a result. These discounts may now have come to an end, but that doesn’t mean that you can’t negotiate a better deal. Shop around to see if you’re getting the best insurance offer, and if you’re still not driving to work, include this in your quotation requests. Check if your car is insured at its current value. Your car depreciates every year, but not all insurers automatically update your car’s valuation when they renew your policy.
While you’re at it, price check and compare all your insurance policies. If you find another insurance provider that will offer you the same cover at a better price, see if your current insurer will match this, or move your policy.
Price compare any subscriptions and monthly services that automatically come off your account (your internet service provider, for example) – it’s easy to sign a contract and never again check whether you’re still getting a good deal or not.
If you rent your home, consider negotiating the rental with your landlord, particularly if your lease is close to renewal. This is a difficult environment for landlords to find good tenants, and this may give you opportunity to negotiate. Your landlord might even consider reducing the rental in order to keep you.
Get serious about price comparisons. Small savings seem like nothing individually, but when you keep finding the cheaper option for different items, the savings add up. For bigger items, make use of Google to compare prices and find the better deal.
For groceries and household items, check the unit prices on items rather than just looking at the price. Bigger packs may be more expensive but could work out cheaper by the unit.
As you cut back your expenses, make sure you include your increased monthly savings in your reboot budget and put this money to work to build your financial security.
