5 tips to help extend your lockdown saving habits
Over the last year, some people in the UK have found themselves in a position where they were able to boost their savings, mainly due to reduced living and travel costs in lockdown. A report from YouGov found that around 1 in 3 Brits had managed to bolster their rainy day funds by an average of £4,500.
However, with the economy beginning to open up once again, it’s been speculated that many people will look to spend these extra savings at the first opportunity. This is not the case across the board — the same YouGov report discovered that around a fifth of Brits are not planning to go on a spending spree at all.
If you’re one of the people looking to continue building up their savings, even after restrictions have been lifted, you’ll be glad to know there are a few things you can do to make life easier. Here are our top five tips for keeping those good habits going.
Reassess your finances after lockdown
One of the reasons you were able to save a bit extra in lockdown was probably because your living costs were reduced. For instance, there was no need to spend on travel if you were working from home, and many leisure activities — like the cinema, eating out or shopping — became severely restricted.
Now, with society slowly opening up again, you might find that you’re spending on things that you’ve been cutting back on over the last year. This means it’s worth taking a minute to reassess your finances and seeing whether it will be possible to carry on saving in the same way.
If you find you were only able to put money aside as costs were reduced, but you want to continue, you could review your spending to see if there’s room to save elsewhere. You can always keep things flexible by putting money into an easy-access savings account, such as our Instant Saver, which allows you to access funds quickly and easily.
Come up with a saving plan that works for you
Saving money doesn’t always work in the same way for everyone — you may need to find an approach that works for you before you can make a regular habit of it.
If you find that you benefit from being a regular saver, then it’s worth coming up with a schedule that allows you to put money aside routinely. You could go with a plan that sees you saving the same sum every week, or you may prefer to save small amounts as and when you can afford them.
On the other hand, you may want to go for an “out of sight, out of mind” method, which involves moving money in big chunks. Many people like to do this on their payday or quarterly, and it means they don’t need to think about it regularly.
Have goals in mind (and celebrate them)
Some people think saving is the dull option compared to spending, but that’s simply not true. If you adopt the mindset that saving is a positive, rewarding act, you are one step closer to establishing a life-changing habit.
One way of doing this is by setting yourself goals and finding ways to celebrate your progress. These objectives could be anything, from setting aside a certain amount each month to getting 10% closer to your overall target. By breaking your saving journey into bite-sized chunks, you can create a real sense of progress.
And, don’t forget to reward yourself when you reach your financial goals. You don’t even have to splash lots of cash on a treat: pamper yourself, take time to do an activity you enjoy, order a takeaway — there are plenty of options out there. This will help to turn saving into a positive act that you will feel great about.
Keep being financially savvy beyond lockdown
Many people have adopted a money-saving approach to their finances during the past year, as well as paying off debts and using credit less (City A.M.). If this sounds familiar, then it’s worth remembering that you can still do this when the rules are relaxed.
While you may find that your daily expenses creep up again, you can continue to be careful to maximise your savings. This doesn’t mean that you need to keep your finances locked down, but by making smart spending choices — like avoiding impulsive purchases, cutting your grocery bills or walking places instead of driving — you can put more money into that rainy day fund.
Maximise the savings you have built up
If you’ve been able to build up some savings over the last year, then well done! You have already created a foundation for your future. But, while you may be thinking about how to add to these funds, it’s also worth considering whether you are currently making the most of what you’ve saved so far.
If your money is sitting in a current account or standard savings account, then you may wish to look into options where you can put your money to work, such as an account with higher interest rates. From ISAs to fixed-rate accounts (like our own Fixed Saver) there are plenty of options out there. You may need to do some research into what’s right for you, but there is certainly scope to grow your savings.