How to budget and monitor spending now lockdown is lifting

With very little to do over the past year, our bank balances have been thriving.

Some people have managed to put away lots into savings accounts while others have cleared debts.

But now, following this year of limited spending, we’re all faced with the challenge of adjusting to our pre-pandemic lifestyles. 

As our social lives resume, our bank statements will slowly but surely fill up with restaurant trips, bar drinks, events receipts, post-lockdown shopping sprees and more.

And, of course, that’s very much OK.

After a year of being deprived of ‘normal life,’ we all deserve to spend money on things we enjoy and have missed.

However, it’s also a good idea to get on top of our finances, as it’s likely we’ll notice all the extra expenses adding up after almost a year off. 

Zainab Kwaw-Swanzy, millennial finance specialist at Barclays, says: ‘As restrictions ease it’s important to remain mindful of how the return to spending on things like socialising, personal care and transport will impact your finances longer term.

‘It can sometimes feel a little daunting if you don’t know where to start, but with the right tools, support and mindset there’s no reason you can’t hang on to some of the positive money habits picked up in lockdown, while finding a way to re-introduce these expenses back into your everyday spending.’

To help us re-adjust to spending again, experts have shared some simple ways to budget and make money go further now lockdown is lifting.

Monitor your spending

Keeping an eye on your spending will put you in control and ensure things don’t escalate too quickly.

Hannah Cole, a financial adviser at OpenMoney, says: ‘Logging into your banking or budgeting app every day is really important.

‘For example, if you spent over £40 on a meal, think about how much of that could have gone towards a food shop for the week.’

Develop new habits

Another good option is to come up with some new ways to handle your money and, if they work, make them a part of your financial routine.

And there’s no harm in trying a few different things – to see what works for you.

Hannah adds: ‘One of my habits is shifting a portion of my money straight into a savings account as soon as I get paid. As soon as your balance is reduced, that can reduce your overall spending and means you’re saving at the same time.

‘Squirreling away a small portion of money into an “emergency pot” is another good financial habit to take up.

‘A good goal is to have at least three months’ salary saved up in your emergency fund to cover any unexpected payments.’

Set yourself goals

Lots of banking apps such as Monzo and Starling have money goals, so you can create a pot and put cash in it – until you reach your target.

Hannah says: ‘Setting yourself a short-term or long-term goal you can save towards – whether that’s a new boiler or a new car – gives you an incentive to put your money towards something, rather than splurging it away.’

Every little helps 

If the past year has taught us anything, it’s that the small things can make a real difference.

Zainab says: ‘As you look ahead to life post-lockdown try not to forget the real value of controlling the small expenses which can help you save each month.’ 

This might be making your own lunches as you return to the office, walking instead of getting public transport or carefully considering whether you’re making the most of all your subscriptions. 

Zainab adds: ‘Why not also take the time to do a bit of life admin and check which tariffs and deals you’re on for the household bills, which could save a pretty penny.

‘By doing a bit of research, you can make sure that you’re not being charged more than you should and will avoid needless spending.’

Think twice

‘Before rushing back to the life you had pre-lockdown, try to pause and think twice about the things you want to spend your money on as you get back into a new routine,’ explains Zainab.

‘Are there things you can now cull from your spending such as the new streaming services you won’t use as much when the country returns to normal? Or did you take up more exercise during lockdown and now want to join a gym? 

‘It’s worth considering how your priorities are likely to change and what things can be swapped in or out as you adjust to a new routine – there could be savings to be made.’

Three practical ways to create a realistic budget:

Hannah says: ‘When you start making any kind of budget, it’s important to make sure it’s realistic and you’ll actually be able to stick to it in the long-term.’

Start by looking at your current spending and your monthly expenditure, to ensure the budget you plan to set is achievable.

Then keep these three things in mind:

1. Visualise your money

She says: ‘It’s always good to look at your money visually to see exactly where it’s going.

‘This includes looking closely at all your direct debits, such as subscriptions that might have been helpful during lockdown but may not be needed as much any more, and gathering together all your bills, receipts and statements from the last three months.’

2. Categorise your spending

She adds: ‘Breaking down your budget into categories is a good way to keep it realistic. Look into exactly how much you spent in the past in different areas, including on food shopping, entertainment, travel and eating and drinking out.

‘When you start making your budget, you’ll know exactly how much you’re likely to spend in certain areas in the future.’

3. Factor splurging into your budget

Hannah explains: ‘Always take into account how much you’d be willing to splurge. If you know you’re liable to make a lot of one-off purchases, factor this into your budget so you can make up for it elsewhere.

‘If you’ve been spending more money than usual as lockdown eases, it’s best to revisit your budget and make some adjustments. If you’ve been splurging for the last few months, try and be stricter in other areas when looking back at your budget.’

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.

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