Lockdown has changed our spending habits, which can mean more opportunities to save money. Whether you work from home, work on the frontline, or are currently looking for a job – now is a good time to revisit spending habits. Here are some tips from Anglicare’s Financial Counsellors on how to stretch the budget during lockdown.
Start a budget
If you have already made a budget pre-lockdown, consider creating a new one that cuts down on unnecessary purchases. If you have never created a budget, now could be a good time to start. If you don’t like spreadsheets or complicated plans, consider applications like Moneysmart to help you track your budget in a simple way.
Create healthy saving habits
If you are currently working from home, try using this time to save the money you would usually spend on coffees, lunches, petrol or transport. Likewise, if you are still going out to work, consider putting aside the money you would usually spend going out socially or on clothes shopping.
Now could also be a good time to start teaching your children about the importance of good saving habits, the value of money and what they can achieve when they set some goals. Consider starting a savings account. The banks offer a number of options for kids. Check comparison websites for the best option banks can provide for you and your child. The Barefoot Investor for Kids has some great tips in this area.
Limit impulse buying
Lockdown has seen many more Australians turn to online shopping. While this is a convenient way to get what we need and a nice way to treat ourselves, it may be helpful to ask yourself, “Do I need this or do I want this?” A good tip to help make this decision is to keep the item you want in your Wishlist or online shopping bag for a week or two, and if you still want the item after some time has passed, then purchase it. While it can be tempting to turn to online shopping as a quick pick-me-up during these tough times, it’s wise not to overdo it, so you don’t leave a dent in your bank account.
Put additional money aside into your Retirement
If you do find yourself with extra money during lockdown, you might want to consider adding some extra savings to your superannuation fund.
You may think that the money put aside by your employer will be enough to give you a comfortable retirement, but in many cases this is not true, and the more you can save, the more secure your retirement will be. And there’s no better time to put that extra cash aside than now. Start in small amounts and build up when you can.
Be smart with your bills
While electricity companies can't disconnect homes or send debt collectors during lockdown, it’s still important to think about usage at this time so that you don’t rack up high energy bills.
Consider the following tips:
If you are struggling to pay your rent, there is rental support available (renters can't be evicted & landlords can receive payments to support tenants during lockdown). Speak to your landlord about flexible arrangements.
If you are a homeowner, banks are offering allowances (mortgage relief, interest rate freezers, fee waivers etc). Check with your bank on additional support.
If you are able to save during lockdown, use the extra cash for higher bills that are caused by lockdown (e.g. electricity, water, debt repayments). If f you do work from home, don’t forget to take advantage of claiming deductions for work from home expenses in your next tax return.
Cook meals at home
Before you go grocery shopping, consider a weekly meal plan. Meal planning is an excellent way to ensure you buy the ingredients you need and avoid wasting food at the end of the week. It also keeps you on track with what to cook for dinner, reducing the temptation to order in as often. Being organised can also help you feel more in control in these uncertain times.
Check your eligibility for Government assistance
Another way to save is to check the NSW Government website for support for individuals and households. You may be entitled to concession, rebates and assistance. Family energy rebates, dine and discover vouchers, creative kids vouchers and active children’s vouchers are also available to help through this time.
Be wary of the risks of online gambling
Being at home all day in isolation can lead to new compulsive behaviours. Reports show that online gambling has become more popular with more of us spending time at home, especially with gambling sites upping their advertisements.
Sometimes a small habit can increase quickly. If you feel your online spending activities are getting out of control, reach out to a family member to talk about it. Mix it up a bit and try other activities that prevent you from isolating including going for a walk, connecting on a phone or pulling out a boardgame or puzzle.
Now that you have some tips on how to save, try putting some of your own spending habits into cost-saving action. Speak to your accredited accountant or relevant advisor before making financial decisions.