The last 12 months haven’t brought us many opportunities to spend big. With the country on lockdown and economic setbacks galore rendering many of us out of pocket and with little to actually spend our money on. However, while some of us have managed to be good and save in the past year, some of us have given in to the temptation of comfort spending (#tiktokmademebuyit).
Now that our social lives have been reborn, however, and we can finally start doing the things we love again, we might need to consider reorganising our finances to face the post-lockdown world with financial confidence. Here are some top tips for budgeting and readjusting to the extra spending that will undoubtedly ensue in the next few months.
Review your budget
Around 21% of us lost income during the pandemic. Some more than others, admittedly, but if you have been even slightly affected by COVID and its many and varied ripple effects, it’s the perfect time to consider reviewing your expenses and examining where you could be cutting back. Look at where you’re spending the most money by logging into your online banking to track spending and monitor your spending closely.
Prioritise spending and automate savings
Budgeting is all about sorting your expenses into two piles – wants and needs. The needs must take priority for obvious reasons. So, put all of your utility bills to one side (including your rent and mortgage payments) and make that the set amount that you will have in your account every month. Fail to do this and you could end up in arrears and with a dismal credit score. A handy tip is to automate your savings using an app that puts your money away for you. It might seem a little alien to trust your finances to an algorithm but it probably has greater spending willpower than you do.
Factor in some extra expenses
You will almost certainly lapse. That much is a given. There will be times when you see something you just HAVE to buy or you’ll get tempted out to an expensive meal with your friends. Make allowances for these kinds of dalliances within your budget. And if you manage to make it to the end of the month without splurging then consider it a nice bonus!
Set goals and be mindful
Setting saving goals both in the short and long terms can really help motivate you to save more. Start small but get more ambitious as you get better at it. And as you’re doing so just remember to be mindful about every penny you spend and every penny you put away. It can be easy to lose track of our expenses when we’re ‘let loose’ after months in solitude but if you can reel in those spending impulses just think of the amazing holiday you’ll be able to afford next year!