Coronavirus has changed everything – we have to stay indoors, away from our friends, loved ones, jobs, and the things we like doing. It sucks.
But every cloud has a silver lining and in the case of coronavirus that’s more silver in your pocket – namely, the opportunity to change your saving habits and put yourself in a place where you can afford the things you dream of owning.
I’ve given you some great, actionable advice that you can put into practice today and enjoy the spoils of long beyond tomorrow.
Recommended reading: 10 Tips To Manage Your Money During COVID19
Plan out your savings goals
Coronavirus lockdown presents a real opportunity to change your saving habits, but you need some goals if you’re going to make it stick – otherwise, there’s nothing to drive you forwards and keep you motivated once life returns to normal.
Start by thinking about what you want to put your extra cash towards and establish how much you need to save.
For me, the big one is saving for a house – I’m one of the many millennials who have been hit by the housing price boom, meaning that it now costs a heck of a lot to buy one.
I checked how much I needed to save by entering my details into a mortgage broker website. If you’re like me then you can learn more about how it would cost you to save for a house by doing the same thing – you’ll find out the numbers in minutes.
However, if you’re saving for something else then the process still works in a similar way – find out how much the thing costs, then decide how much you’re going to save each month.
One thing I recommend you do is to have some different savings goals. For instance, I have three separate goals – saving for a house, saving for a holiday, and saving for a rainy day.
Keep all these funds separate so that you can compartmentalize your money.
Start recording your daily spending
I’ve got a confession to make: I’m actually one of those boring, annoying people who loves spreadsheets and uses this to aid their saving habits – don’t judge me too harshly!
And stay with me for a moment – the thing about building a spreadsheet to record your savings is that it lets you visualize your habits, so you can see what effect your spending/frugality is having on achieving your goals.
I created my spreadsheet using Google Sheets and I did it like this:
- Incomings: salary and any other entries
- Outgoings: all the essential payments – rent, bills, etc…
- Savings: total amount to be saved
This gives the total amount (remainder) I can spend each month
I then work out my weekly allowance:
- Days till payday: how many days are in the month
- Weeks till payday: days til payday ÷ 7
- Weekly allowance: remainder ÷ weeks until payday
I then map out each week of the month so that I can record every time spend any money, so that everything is accounted for:
The amount I spend each week is then subtracted from the total amount I’m allowed to spend each month – at the end of each paycheck, I can then see what my spending habits are and if I have any money left over.
Now, you may want to create your own spreadsheet, use the budget planner that comes with Google Sheets, or record your spending in a different way – that’s fine. What’s important is that you do record your spending, because then you’ll see where your money is going and if you could be saving any more of it.
Stop living for the weekend & start planning for it
Coronavirus lockdown has restricted our freedom to go out, stopping you from eating out, drinking with friends, and attending events. It sucks, but that’s precisely why it’s thrown up an opportunity to change your spending habits.
I’m sure you’ve been making plenty of plans for what to do once you’ll do once lockdown is over – who you’ll see, where you’ll go, what you’ll drink.
This is all good stuff because it gives you something to look forward to. It’s also something that you can use to help change your saving habits.
By putting a stop to living for the weekend and planning for it instead.
Here’s how you can do it.
Remember that daily spending spreadsheet I told you about? Your weekend events go on there now – you plan out what you’re going to do and your budget for them, in advance so that you know how much money you should really spend.
My recommendation is that you restrict yourself to one event a week – week one might be dinner out, week two could be drinks with friends, week three could be a gig, week four could be an outdoor activity.
Don’t like the sound of that?
Well, the thing is that you’re already finding ways to entertain yourself indoors so one outdoor treat a week is four more a month then you’re already getting – you’re in a culture of restriction now, so use it to your advantage by working towards your savings goals.
My suggestions aren’t revelatory – they’re simple ideas that you can easily apply to your daily life. However, by taking them on board you can get a real positive out of the drudge of coronavirus lockdown – a real change to your savings habits that lets you achieve your goals.