Were you one of the few who hit the pub as soon as the clocks turned midnight? Or were you in the queue to hit Primark as soon as its doors opened? After months of lockdown, England is reopening for business.
We have all got used to having nowhere to go and nowhere to spend our cash. But as things start to reopen, have we thought about what this means for our finances going forward?
What businesses are reopening?
We’ve reached the next step of the roadmap out of lockdown. Some major parts of the economy are now allowed to reopen, meaning that town centres and high streets will be buzzing once again.
At the time of writing, the following businesses are reopening:
- Pubs, restaurants and cafés for outdoor table service
- Outdoor settings like zoos and theme parks
- Non-essential shops, hairdressers and public buildings
- Swimming pools and gyms
- Self-contained holiday accommodation such as self-catering lets
Is now the time to splash the cash?
Businesses and the government alike are hoping that the pent-up demand from the past few months will mean that people will get out and start spending their money.
While Britain avoided a double-dip recession, economic growth has still been significantly impacted by lockdown. It is certainly hoped that consumer spending will increase now that large parts of the economy are reopening.
But has the pandemic changed our financial habits? Research from technology and research company Toluna found that Covid-19 helped a lot of us realise the importance of budgeting, saving and understanding money.
How do I budget as businesses reopen?
It can be very easy to get carried away with the idea of a fresh new haircut. But have you actually looked at whether or not you can afford to have one?
While some of us may have been able to save money during lockdown, it could also be the case that your financial circumstances have changed. Making a budget for this next stage of lockdown easing could save you digging into your emergency fund. Or worse, reaching for the credit card when you don’t need to.
Here are some top tips for setting out a monthly budget going forwards:
1. Record your income
Your income may have changed over the past few months. You could have been/still be on furlough. Or you could have had a pay rise. Until you know what you have coming in, it’s hard to know what you can afford to spend.
2. Calculate your outgoings
Yes, this obviously means fixed costs like household bills. But this is also the area of your budget where you need to estimate how much you are likely to spend socialising in the next month now pubs are open. Also consider what you expect to spend on clothes and luxuries now that shops are reopening.
3. Add a buffer
Once you have done the first two steps, then add in a buffer. Even if it’s £50 for the month, it just gives you a little bit of breathing space if you do get carried away.
While it may be tempting to allocate a lot to discretionary spend with shops reopening, it’s also useful to have some savings goals in mind. if you are worried about ensuring you save over the next few months, then may consider harnessing the power of technology.
Apps like Plum and Chip use AI technology to calculate how much you can afford to save based on your spending habits. So if you do end up hitting Primark, getting your hair done and indulging in a few drinks in the beer garden all in the same week – the apps will adjust the amount allocated to saving accordingly.