Lockdown was the perfect chance to cut down on spending and build up the savings account. As a result, budgeting became a hot topic that saw many people creating a spending plan for the first time in their lives!
But how are those saving and budgeting habits looking now that we’re out of lockdown and back into the old routine? I found that my budget wasn’t fit for purpose, so I made some changes.
Lockdown saving figures
During the height of lockdown, the average UK household managed to save 29% of their total income.
However, the lockdown savings rally has since petered out. As well as this, people are slowly starting to give up on the budgeting habits that they learned during Covid-19. In July 2021, Brits were saving 29% less than they were back in March.
A big part of the problem is that budgeting plans made during lockdown don’t quite work for post-lockdown life. When you were stuck at home with only your cat for company, it was probably easy to stash away a little extra each month. However, now you may find yourself drowning in extra expenses that you weren’t prepared for when you made your budget.
I was the same! Just a few weeks ago, I sat down and tweaked my budget plan to account for my new post-lockdown lifestyle. If you’re in need of a little budget inspiration, here’s how I’ve changed my budget to fit in with post-lockdown life. Having a budget makes it easy to save and can prevent you from running into financial trouble.
Post-lockdown budget adjustments
During lockdown, my only expenses were rent, food, electricity and the occasional online shopping spree. Because of that, budgeting my income seemed easy and I was able to make considerable savings.
Despite the extra costs that come with post-lockdown life, I am still able to save money each month. I have achieved this by creating a new budgeting plan that allows for the new expenses I’m facing.
Here are my top budgeting tips for surviving post-lockdown life.
1. Make room for a social life
For me, the biggest expense came with the return of my social life. Over lockdown, I forgot how much it cost to buy a round of drinks, an Uber and the occasional new outfit. It all adds up and can quickly eat into your savings!
To make room for this, I’ve given myself a (reasonable) weekly allowance for social events. If I don’t use up the allowance one week, it rolls over to the next. By doing this, I am able to enjoy socialising without spending beyond my limits.
A good tip is to use cash instead of a card (as long as Covid restrictions allow it). This way, you won’t be able to spend more than you budget for.
Don’t make your socialising budget too tight! Doing this will only encourage you to overspend. And once you start doing this, it can be difficult to stop.
2. Consider the price of transport
Working from home saved the average commuting Brit £49 per month on petrol. Those who were reliant on public transport made huge savings on the cost of getting the bus or train.
Now that lockdown is over, it is important to factor transport costs into your budget. If you are a regular driver, then work out how much money you will need to buy fuel each week. For my budget plan, I have created a weekly allowance for public transport and have also considered the cost of missed/cancelled services.
Forgetting to set aside money for travel could leave you eating into your savings. If your budget is small, there are plenty of ways that you can cut down travel costs, such as carpooling – or even cycling, if you live close enough to work.
3. No more furlough
This is a big one that has left many people in financial hardship since the end of lockdown. As of March 2021, the government no longer made furlough payments. This means that companies are no longer given funds to pay employees who can’t work due to Covid-19.
The absence of furlough pay could land you in trouble if you contract Covid-19 and have to take time off work. If you are paid hourly, you could easily find yourself earning considerably less than your budget accounts for.
As a freelancer, I am paid for every piece of content that I create. To prepare for the possibility of falling ill with Covid-19, I have set aside enough money to cover one week’s worth of work. Those who get paid an annual salary should set aside enough money to cover a few weeks of sick pay also.
The post How I’ve adjusted my budget for post-lockdown life appeared first on The Motley Fool UK.
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