When the COVID-19 pandemic hit the UK, the first worry most of us had, beyond the obvious health concerns, was “how will this affect me financially?”
Depending on circumstances, the answer has been very different for everyone involved, but what most wouldn’t have predicted in March last year is that it has been a largely positive financial period for many. In fact, those able to save have enjoyed a £1,085 boost to their coffers on average, in many cases with little to no effort to modify spending at all.
With lockdown (hopefully) on the brink of being in the history books, there will be a lot of us coming out of the last 12 months in a much-changed financial situation. For those better off, it’s about keeping things going. For those in a worse situation, it’s about recovery. Here are three ways to attack your finances post-lockdown.
Do your best to stick to your lockdown budget
If you weren’t sure whether you were the sort to frivolously spend and actually had your monthly budget in tight order, then the lockdown period probably showed you a thing or two about how far your money can go. The shutdown of restaurants, shops, nightclubs and virtually all other retail and entertainment venues has meant we haven’t been able to spend any extra cash, even if we wanted to, and has gone a long way to helping people save without having to address their monthly outgoings.
The real challenge will be maintaining some essence of these improved behaviours once lockdown is over and all those social and commercial resources are back available. Of course, you’ll want to enjoy yourself by getting back in the pub with friends and enjoying a meal out or two, but the saving benefits of the lockdown period should hopefully have done enough to inspire to keep closer tabs on your unnecessary spending every month.
Sort out your debts
One of the first rules of good financial management is to clear any debts you have before creating new ones, and perhaps you find yourself in a better position now to go after the debts you have to your name. Paying off debt isn’t a particularly fun part of money management, and while you won’t see any tangible return on your efforts in the immediate term, the benefits of removing debt from your name cannot be overstated.
If you have any big spending plans coming out of lockdown, think about putting them on hold until your existing debts are out of the way. You’ll thank yourself for it later.
Look into new savings and credit building opportunities
If you have managed to save some money over lockdown and still have that extra cash sat in your current account, it’s time to think about doing something more productive with it. Right now is as good a time as any to look into starting a savings account, opening a Lifetime ISA or ways to improve your credit profile – like taking out a credit card for regular, credit building repayments or reassessing your direct debits.
By moving your spare money into a separate account, or, even better, a high interest ISA where you’re not allowed to touch it for a while, you’ll be helping to ensure what money you have saved goes to good use in the future rather than being frittered away. Perhaps not the “YOLO” play, but the smart and sensible one for the future.
The secret behind good money management hasn’t changed through lockdown. However, in many cases, our personal financial circumstances have. Post-lockdown life will present a fresh set of fiscal challenges and opportunities to us all, so make sure you make the right decisions when normality resumes.