The Big 2020 Lockdown has hit us all in ways we could never imagine. Whether it's sprouted a new work-from-home culture worldwide, enforced homeschooling or a deeper respect for teachers and other key workers, these past few months have changed us all. And made us realise, yet again, the transient nature of Life. How things can change in an instant. And it's also made a lot of us re-think our finances and savings, now that the economy has taken a slump the world over and we're all in deep recession. Jobs have been lost, could be lost. Small businesses are on the brink of closing down; some have already shut shop. Promotions and salary hikes are on the back-burner. If there was ever a time to think about your finances and financial future, and consider saving, it's now…
1. Cut down on eating out
We did it for over two months: stopped eating out. With restaurants being shut, we had no choice. Something that we did just out of habit, perhaps, or laziness, or just because it was the weekend… And it's made us realise just how much we can save by limiting eating out in restaurants or ordering take-aways.
Take your morning coffee, for example. How many of us 'grab' our morning coffee 'on the go' on a daily basis? An average medium-sized cappuccino costs £2.25. That's an average of £540 a year… just on your morning coffee! Which could be made and consumed at home for less than quarter that price. (Not to add the croissant or the cinnamon bun that you will most likely also buy with your coffee.) For a clearer picture of how much you could save, check out this money saving calculator.
2. Shop only when you NEED to, not 'just because'…
Retail shops have been closed since March. We haven't gone on a 'shopping spree' since then. No random weekend shopping just because we're making an outing out of a mall trip. No 'might as well buy it' just because it's on sale. No impulse buying that came out of a window-shopping trip. And we've survived! We need food and other home essentials to survive, not a new outfit or handbag every few weeks. (Yes, there is online shopping still at your fingertips, but if you can do without going to the shops you can do without random Amazon buys.)
3. Swap branded names for supermarket's own version
Often, the things we do and have been doing ever since we can remember, are just out of habit. Like the branded items we buy in our weekly groceries shop, which are double (if not more) the cost of the supermarket's own version. Why not swap one for the other and see the immense difference in cost and negligible difference in taste?
4. Save up for a rainy day
I've grown up in a culture where it is customary to save a part of one's earnings every month. Growing up, I was taught the concept of 'saving for a rainy day' or for unforeseeable circumstances. Or even if for no other reason than senselessly spending all your earnings and living paycheck to paycheck. With mortgages and the way of living being different in the UK (as opposed to many Asian cultures), it's not always easy to keep aside a part of one's earnings every month, but if there was a time to start doing so, it is now. The worldwide pandemic has shown us how livelihoods can change overnight and jobs can be gone the next morning. You don't need to start big – even £50 a month can add up to £600 at the end of the year. Every little counts…
5. Learn to live credit-free and loan-free
Avoid piling up your credit card bills and loan re-payments because without realising it, these amounts can build up to a huge sum over time. Make it a habit to clear off your credit card bills on a monthly basis – this way, you will never live in fear of debt.
6. Teach your child the difference between 'needs' and 'wants'
Today's generation of children have everything 'on demand' and at the tip of their fingers. There is instant gratification for every want of theirs. While we had to wait a week or more to see 'developed' photographs of our family holiday, our kids are deleting pictures almost as instantly as clicking them. While I had to do actual 'research' for school projects via a number of books in a library, my son just needs to ask Alexa or ask me to "google it". Which is why kids today cannot differentiate between needs and wants, and this period of frugal living during the lockdown is the perfect opportunity to teach them. For instance, when Little Man felt like an ice-cream last weekend, I refused to just pop into the shops and get him one. Because it wasn't necessary to have ice-cream during #stayathome orders in the midst of a pandemic. It was a want, not a need. And it was just as easily satisfied with a chocolate.
These are a few things we can start doing NOW… it's never too late (or early) to start saving! If there's something positive we can take from this pandemic, let it be teaching us to get money-wise.
Any tips that you would like to share, on how to budget, manage your finances wisely and save up for a rainy day? Please do so in the comments!
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