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Written by: Becky O’Connor
15/04/2020
Many will be facing financial hardship during the coronavirus lockdown but others will be lucky enough to continue to be paid while cutting back on usual costs.

While millions of people suffer a drop in income, through job loss or furlough or decline in business revenue, others sit guiltily on the other side of the fence – feeling bad they’re still earning as normal. But not only that, they are saving like never before due to a remarkable drop in spending.

I’m in this latter camp (for now anyway). I would never, ever take income or employment status for granted ever again (not that I ever did).

I do always save some of my income, but usually at a minimum level. For the last three weeks, I’ve saved a huge amount of money.

Not commuting for two hours a day has saved hassle as well as money; no petrol costs from taking my kids to school and driving to the station, no holiday bookings, not buying takeaway coffees or chicken katsu curry from that lovely little deli opposite the office in the City of London, no after work drinks, no make-up/gel nails/other beauty spends (because who cares what we look like now?), no evening meals out with friends, no weekends away.

Plus with some online shopping discipline – the last bastion of spending temptation – all this has saved me the best part of £1,000 in the past four weeks.

The commute has been the biggest saving. It’s usually £25 a day, two or three days a week. So £300 up on the month. We usually spend about £60 a month on petrol.

Takeaway coffees, after work drinks and treat City lunches? Probably about £80 saved over the month. Not paying for holidays? We were having a low budget, no fly year anyway on that front, so no particular saving there beyond a planned ferry trip to Northern Ireland, which would have been about £500 – luckily, we hadn’t booked it yet.

There have been some things we have spent more on – we’ve bought some films from Sky to ring the changes on the TV, we’ve definitely spent more on food, not through bulk buying, just from having more constantly hungry mouths at home all the time. And I’ve spent more on crafts and puzzles for my kids than I would normally spend in a year. But this extra spending has not matched the normal spending we haven’t been doing.

The next dilemma is what to do with this saving. I have a bit of credit card debt I could pay off. Then could add to my pension, although I already pay up to the maximum for employer-matched contributions.

I could add it to the holiday fund, not knowing, of course, when we will next be able to book a family trip. I have been considering paying off a bit more of the mortgage than usual, as that could help us with house moving plans, which were on the cards, and may yet still be on the cards when house moving is a thing again.

But I am concerned about what happens after lockdown. Will prices for holidays suddenly shoot up? Will mortgage lender restraint continue? Will we face a prolonged recession? It feels like the best thing to do with spare cash in the face of uncertainty is simply to leave it somewhere easily accessible and build up a buffer – just in case, for we all now know what an emergency scenario actually looks like. Interest rates on easy access accounts mean we are practically paying banks to look after our money after inflation, yet it still makes sense to have some readies there, even if they aren’t making a return.

There will be more spending temptation to resist as the weeks wear on. In lockdown times, a new vacuum cleaner and a new TV to replace our 12-year old one seem like increasingly rational purchases, if we were to treat ourselves to anything (yes, it’s saying something that I consider a vacuum cleaner a treat).

I also expect I might have to splash out on some professional sofa and carpet cleaning once this is over and the kids, with their peanut butter-covered faces and dirt-covered legs, have finally gone back to school. There’s the suddenly very tempting homeware and loungewear ranges to avoid making eye contact with, too.

This ‘timeout’ of normalcy has taught me something about spending patterns and how much we do automatically and habitually. It has taught me that going without even for a relatively short period of a few weeks can mean a huge financial boost, if your income does stay the same, of course.

I’ve realised there’s an awful lot of spending I do just in the course of the everyday, which if removed, makes a big difference.

It’s not been so bad for us as a family to be stuck in close quarters for weeks. We’ve quite enjoyed the slower pace and extra time together – and afterwards, when lockdown ends, I think we’ll be happy to continue this more muted way of life, without feeling we have to rush out to this or that activity centre, or National trust property, just for something to do.

Time does not always have to be filled, particularly as doing so often costs. We might even take more holiday time at home. The more time I spend in it, the more lovely I find the costa del garden. Knowing that it is saving me money by choosing it over other destinations will make it all the more appealing.

If like me, you find you are making some surprise savings during the lockdown, think carefully before reverting to the temptation to gleefully spend it. And when it’s over, perhaps take comfort from how you adapted and from the knowledge that you can always make cutbacks if necessary. The need to save, plus our ability to make it happen if necessary (and if we are lucky enough to still have an income), may be one of the most useful personal financial lessons to come out of this crisis.

Becky O’Connor is personal finance specialist at Royal London

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