MONEY and saving habits have been upended by coronavirus recent months and families across the UK have been forced to adapt. Due to the necessity of it, plenty of people have embraced effective savings habits but some fear that these may fall at the wayside as the economy opens up again.
Money advice and savings tips are always sought out by struggling consumers but it has been taken to extremes in recent months. Coronavirus has forced people to adapt to a new normal and as a result, budgets have had to be stretched to their limits.
The lockdown rules enforced by the government have added to this tension.
As the country effectively closed down, it restricted where money could actually be spent.
Virtually everyone will be longing for some sense of normality to return and thankfully, it looks like we’re on the verge of seeing that happen.
In recent weeks, the government has announced plans to slowly reopen the economy and retail stores may soon be able to be visited again.
Consumers, who may have been struggling with being cooped up for so long, will likely be very excited to hit the high-street again and embrace some retail therapy.
If international travel also opens up people could go wild for taking some impromptu holidays.
This is all completely understandable and consumers deserve to treat themselves following such a traumatic period.
However, it would also be a shame if the savings habits we’ve built up were to go to waste.
Ricky Knox, the CEO and co-founder of Tandem Bank, shared his analysis on what savings habits have emerged from coronavirus which should/could (hopefully) continue in the coming months.
Small changes and habits
Ricky highlighted that the painful shopping limitations we’ve faced may have led to healthy, frugal actions: “With all of us only able to go to the shops once a week (or less!) We have been forced into meal planning so that we don’t run out of food.
“With days becoming quite similar and weekdays and weekends merging into one, meals have become something to look forward to, with many of us enjoying taking the time to cook. “By planning our meals we are not buying random ingredients or picking up food as we go – we are buying what we are going to eat and therefore saving money and not throwing as much food away.”
A by-product of businesses closing their doors is the huge number of workers who no longer need to commute.
While the closing of businesses is undoubtedly a negative thing overall, Ricky pointed out the silver lining: “Putting aside the money you would use to travel into work each day has been a great way to save money.
“Most of us (although not all – thank you to all of our key workers!) are working from home and therefore not spending the money we would normally use to commute.
“This habit can help us to put aside manageable amounts of money each week and so build up a small savings pot.
“Whilst we might have to start spending money on our commute again, a lot of us are now used to making coffee at home, so can start putting the money we would spend on these daily treats aside to build up our rainy day fund.
Another thing that the lockdown has brought us all is an abundance of time and Ricky shared his insight into how consumers can be proud of how they’ve utilised it.
We’re now in a position to finally catch up with our “to-do” lists and many of us have focused our energy on our finances, as Ricky detailed: “With the extra time many of us may have on our hands we have been researching the different types of savings accounts available.
“This has been the best time to read up on the offers available from banks, building societies and fintechs to see who has the best interest rates and what types of accounts they are offering to help you grow your money.”
This also spread to our bills: “As we have spent so much time in the house, lots of us have been checking to see if any household bills can be reduced.
“Switching suppliers for utility, phone and broadband bills is one of the simplest and quickest ways to save money in your home – it does pay to shop around!
“If you don’t want the headache of leaving one provider and starting again with another, it’s also worth trying to negotiate a better deal with your current provider.
“Cancelling unwanted direct debits has prevented us from continuing to pay for things we no longer use! If you don’t regularly read your bank statement (which you really should start doing!) it can be easy to miss those direct debits you have forgotten to cancel.
“Get into the habit of regularly logging into your bank account or an aggregator service to make sure you aren’t paying for services you no longer use or no longer want.”
Some of these habits, Ricky warned, may be left at the wayside as move forward
What may be forgotten?
The aforementioned coffee habits we’ve picked up could be one of the first things to go.
Ricky warned that the temptation of purchasing a coffee may be hard to resist: “Lots of us have been putting this money aside and adding it to our savings accounts instead of spending it on something else that we likely don’t need.
“However, with coffee shops starting to open up there is a danger that this habit might fall to the wayside pretty quickly! With the average coffee costing £2.44, Brits could save almost £50 every month by just making a coffee at home or in the office.”
There have also been reports in recent months of people turning to walking and cycling instead of driving or taking public transport.
This has obvious health benefits but it would have also saved people hundreds of pounds.
Unfortunately, it may not continue as we all head back to work as Ricky noted: “When workplaces start opening up again it will be extremely tempting to just hop in the car and use petrol or jump on the train or tube to get to work quicker.
“However it is really important for our environment, our health, and our finances, that we try to keep this habit going for as long as possible.
“Obviously for lots of people walking or cycling to work isn’t an option, but if you can do it and keep saving that extra money it will make a big difference in the long term to your savings pot.”