The lockdown has provided me with the opportunity to take a closer look at how I manage my cash. Here’s what I learned.
The lockdown has been a bit of a rollercoaster. Even as someone who works from home normally, it’s been a challenge, and I know that I’m incredibly privileged with a wife who used to be a teacher and a couple of well-behaved kids.
But it’s also offered the chance to make some changes to the way I manage money, and I think I’ve learned a few things along the way.
Where was my money going?
Many of us will have taken the opportunity provided by lockdown to have a closer look at precisely where our money was being spent each month in the pre-COVID world.
And at times, it has made for pretty painful reading.
The big one for me has been food. As a family, we spent way too much on food just in our trips to the supermarket. I live very close to an enormous Tesco and we were in there every five days doing sizeable shops, with the occasional ‘top up’ as well.
Understandably, things have had to change.
Now we shop once a week, and are more disciplined in working out exactly what we will be eating and what we really need, rather than being tempted into an extravagant purchase by the ‘deals’ at the end of the aisle.
And as a result, our overall spend has dropped noticeably.
It’s not just the supermarket spends either ‒ we indulged in too many takeaways and trips to Costa. Don’t get me wrong, we will do that again once life gets closer to normal but it won’t be anywhere near as frequent.
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Bills, bills, bills
Every month, a big chunk of my bank balance disappears on bills. But if I’m honest, while I knew how much it would come to in total, I didn’t pay much attention to the size of the individual bills.
For example, what is my broadband bill, compared to my mobile phone? How much does my gas and electricity set me back?
Again, lockdown has provided me with the chance to look at these bills in a bit more detail and make some changes.
Knowing how much your bills come to in total simply isn’t good enough ‒ if you want to ensure you’re getting value for money, then you need to know what you’re actually paying.
I’d like to think that I’ll take this more engaged attitude with me into the world once lockdown ends.
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Use a savings safety net wisely
Our garage is a bit of a mess. It has an old metal roof that has developed holes, which means we have carefully placed buckets on the floor.
Earlier this year, we looked into getting it knocked down and replaced with something we are likely to use for more than simply a dumping ground for the boys’ bikes and my old golf clubs.
The prices quoted were, in all honesty, far more than I was comfortable paying but we’ve built up a decent savings safety net and I was sorely tempted to dip into that to cover it.
The pandemic has been an important reminder of why that would have been a bad idea.
That money is there as a safety net, to cover the big, important expenses and ensure we’ll be covered the next time a gigantic, world-changing event happens.
It’s not there to help me turn my fantasy of a home gym into a reality, especially considering I’d probably not use it enough to justify the expense.
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The importance of routine
Back in the early days of lockdown, my kids and I would do the Joe Wicks workouts every single day. It was just part of our routine, and I lost weight in the process.
But the novelty wore off about six weeks in and the kids didn’t want to do it anymore.
And rather than carrying on myself, since I was enjoying it, I told myself I’d just exercise at a different point in the day. What actually happened was I more or less stopped exercising altogether.
The fact is that I’m a creature of habit. If I have something set in my routine then it happens ‒ if I do it on an ad hoc basis, then chances are it will soon fall by the wayside.
This is important for my finances too. If I book it into my routine that as soon as I get paid, I put a chunk into my savings, then it will happen.
But if I hold on until the end of the month, in the hope I’ll have money left to transfer over, then I probably won’t. By leaning into this, I can get my own finances in far better shape.
These are just a few of the lessons I’ve learned during lockdown, and which I hope to put to further use in the future.
Have you had any ‘financial epiphanies’ during lockdown? Tell us in the comments box below.