Lessons learned during lockdown
Have your finances been hurt or helped during lockdown? The obvious answer for most is that it has been hurt. It’s been painful not being able to buy those non-essentials during lockdown – such as DIY products, take-aways, alcohol, cigarettes, shoes, or the beauty products we never go without.
Lockdown has, however, challenged our definition of what we “want” vs what we really “need” and showed us that we can survive without these “wants” if we have to. Impulse buying has been significantly limited. And we survived!
Now is the time to change our ways and form new habits that can help us move forward financially. Instead of going back to our old ways of spending on wants, we could pay ourselves first every month – sort of like rewarding yourself for a month of hard work – by deliberately allocating money to a savings or investment plan. Starting this new habit now will be much easier as we have survived for several weeks without spending and we have managed to save money during the lockdown. Not having to spend on travel or vehicle maintenance has also provided extra cash if you have been lucky enough to be working from home. Use that money as a deposit into your new savings plan.
Put a debit order in place to automate the monthly payment into this savings plan after lockdown. We have become used to less impulse buying – we might as well continue and form a new habit. Even if it is a small amount, start now – the longer we save the more we benefit from interest on interest which is the secret to growing our money over time, and the more time we have the better and the more our money will grow. The amount is less important, just stat. Over time we could save more if and when we can afford to, for example, if we get an annual salary increase. At salary increase time, we could up our savings plan debit order so that we don’t get used to the money to spend it unnecessarily.
When our investment pays out we can still go on a spending spree, but it will be with a bigger amount and most likely a more considered approach because:
- We have learned the discipline of paying ourselves first every month before we spend.
- We have seen the benefit of building up a bigger amount of money over time.
- We probably will have a bigger amount to spend and can buy something that would possibly not have been possible without the discipline of saving.
But beware! After lockdown, we will see many retailers launching specials and enticing us with “not to be missed” deals. The trick is not to get sucked in by all of that. If there is a great deal on something we need – take advantage but don’t buy just because it is on special. We could resist the temptation by making a list of items we need to shop for when lockdown is over and sticking to that list when lockdown ends.
If we are easily tempted – we could remove ourselves from shopping alerts and specials mailing lists.
We should use the lessons from the time spent in lockdown to implement some positive new behaviors that will help shape our ‘new normal’.We have proven to ourselves that life is possible and can be fun outside shopping, eating out all the time and partying every night. We have had to find creative ways to keep ourselves entertained, enjoy our own homes, reconnect with our family, we’ve had to cook for ourselves, and we’ve had to find ways to stretch our money. We’ve also had to find ways of enjoying the simpler things in life, and in the process, we have proven to ourselves that we can do it.
That does not mean that shopping, going out and partying should stop, but we can implement new patterns for ourselves that would allow us to develop a habit of saving and still enjoy life.