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Life in at home – what lockdown could teach us about our spending habits

Michelle McGagh takes a look at what we’ve learnt about our spending habits while in lockdown and what this could mean for your financial future.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Life has changed dramatically in little less than a month, and as we enter another three weeks of lockdown, the mood seems to have changed yet again. Yes, people are still longing for a night in the pub, but there are also murmurings about life lessons being learnt from lockdown.

Talk has turned from what we’re missing out on to what we’re gaining by being forced to stay indoors. While in lockdown you might have had time to consider what your life will look like when this crisis is over.

People are reassessing what’s important to them, reprioritising their wants and needs.

What are you truly missing?

I’m well versed in this reassessment of priorities thanks to a no-spend year I completed in 2016 where I spent money only on bills and basic food. But I never could’ve imagined that experience of stripping my life back to essentials would prepare me well for lockdown.

What I learnt from my previous experience, and what I believe people are realising in lockdown is the things they’re missing aren’t ‘things’ at all.

When the option of filling our lives with buying an endless stream of needless things is taken away, we begin to realise just how little we need those items. All of our lives have been stripped back to essentials, and we have no choice but to appreciate them. All the Amazon ordering and clothes shopping is all an additional ‘nice to have’ but I bet if you really think about it, you’re not missing it that much at all.

Time to reflect and assess

Freeing yourself of the obligation to buy and to have the latest things is an opportunity to decide whether what you’re spending your money on is really worth it. If it’s actually bringing a long-term benefit to your life.

Those who have been furloughed or seen their work dry up completely don’t need to be told a reassessment of their finances is crucial. But for those who are fortunate enough to remain in work, a reassessment could be an eye-opening exercise.

If you compared your spending in March this year to your spending in March last year, how different would it be?

What did you buy last March that truly added value to your life? Are the clothes you bought languishing in the back of your wardrobe? How many times did you use that must-have kitchen gadget?

Develop good long-term habits

The enforced shopping hiatus Covid-19 has brought with it might see a different type of consumer emerge from lockdown – one who can distinguish between needs and wants. But more importantly, a new type of saver could also emerge from lockdown.

With the spectre of a deep and long-standing recession looming over us, it’s now more than ever that we need to think about tightening our belts and put money away for the rough road ahead.

Lockdown has given us and our savings a head-start and now is the time to develop good spending habits, to think about our financial futures, and save.

Michelle McGagh is a personal finance journalist with over a decades’ experience. Michelle has written for The Guardian, City Wire and Money Observer, among others.

Hargreaves Lansdown might not share the views of the author.

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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