Some people used the pandemic to save money and emerged out of lockdown with a deposit for a house.
Others, chased dopamine in the form of (according to my Instagram followers) mid-week Deliveroos, natural wines, inflatable boats, tiara’s, ant farms, hot tubs and baking/candle making/sourdough equipment, in an attempt to treat themselves into happiness.
I was buying my weekly shopping in my local deli, (the Delifonseca Dockside) in order to make eating at home a little fancier and also help a local business hugely impacted by the pandemic.
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It was the perfect splurge. I could act frivolously and also praise myself for supporting local suppliers.
Now that restrictions have eased, lots of people have adopted this YOLO attitude into their everyday lives.
Eating out used to be a fortnightly luxury, where as now its multiple times a week. Rewarding ourselves for a day back in the office by picking up a posh bottle of wine on the way home. Taking every opportunity to meet up with friends over boring nights in. And paying premium prices for relatively local hotels, in an attempt to quench our thirst for something different.
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Our lockdown spending can be easily explained, we were exhausted and desperate for distraction. But now we’re no longer battling through daily anxiety and turmoil, why can’t we stop spending?
According to scientists, dopamine hits best when its in moderation. Like a drug, this hormone is less effective when you receive it all the time. Maybe that’s why we’re all chasing more, more often. Having something to look forward to undoubtedly lifts our mood. But what’s the point of waiting when we live in a world where anything you want can be delivered directly to your door, almost the same day?
The Financial Times coined the phrase Treat Brain, to describe our adoption of these new, comfort-seeking behaviours. Our spending has changed once, so it can change back, right?
If you’re a low income family, or a single parent family on a reasonable income, simply existing in these late-capitalist times is expensive. With rent, food and fuel bills all skyrocketing. Your disposable income can be so small it seems pointless to save it. You may as well enjoy a small treat in the form of a takeaway, or a piece of fast fashion rather than save for house prices that are astronomical and holidays that seem out of reach.
But be mindful that your children will likely inherit your money habits. How you deal with money will influence how your children deal with money when they grow up. Children do receive some financial education in high school, but the bulk of their habits for dealing with money are learned from watching their parents.
When I was young and my Nan won the National at the Bingo and declared she was giving my mum and dad £500, we immediately had a family meeting about what to spend them money on. Car? Or holiday? (Listen, it was about 1992. Both cars and family holidays were £500. Glory days!) There was never any mention of saving it, investing it or buying the council house we lived in. That money was going to be enjoyed the moment it landed. And on it went like that, whenever we had some money.
I sometimes see it in myself now and my son can’t keep a fiver in his pocket for over and hour, so I know it's hereditary. I feel amazing when I have savings, but inevitably I’ll see something that I suddenly absolutely need and think, well I’ve been skint before and I didn’t die. So why not?
So how to be begin to tackle our money habits when the subject is so taboo? Spending money is such an emotional experience. Buying a new sofa you’ve lusted after for 18 month feels amazing, whilst paying a parking fine or replacing a broken washing machine can be sickening. Feeling overwhelmed by debt is terrifying but receiving a cash bonus from work makes you feel unstoppable.
Being good or bad at money can be moralistic and viewed as a measure of character. But it's actually more about your perusal habits and how you view the world. There are no formal systems for learning about money and millions of invisible forces aimed at preventing us from holding on to ours. We’re discouraged from talking about it and told it's vulgar to ask people what they earn or pay for things.
Collectively, we need to let go of the shame associated with money. Being open and addressing it will feel like a huge achievement and weight off your shoulders, especially after a period of burying your head in the sand.
We need to normalise debt by talking about it.
Culturally, we have good debt and bad debt. Mortgages and renovation loans are good, high status debts. Because they prove you’re worthy of borrowing large amounts and that's a direct reward for being good with money. Just like the old saying goes, people who have money attract money. Then there is the bad debt. Dirty credit cards, disgusting overdrafts and at the bottom of the barrel, the payday loan. But the reality is, everyone has debt and the majority of us are a little stressed out by it.
The best way to change how you deal with money is to track what you spend. Write it down every time you spend. You’ll be surprised to find you’ve spent £150 on small grocery shops this week, when you only budgeted for £50. You’ll be able to see exactly where your money is going.
Set a budget for every last thing, every app subscription, petrol, upcoming social events, even coffee and meals out. That way, even though you’re spending, you’ll feel good if you’re still within your budget.
Set a goal. If you want to move out, or pay off a credit card, you’ll be more motivated to change your spending habits. Then, when the urge to spend money impulsively and inevitably pops up, you’ll have more motivation to sit with it and talk yourself down, rather than act.
Do you know that whatever company you’re in debt with has a reasonability to make sure you can afford repayments? So whilst they’ll keep increasing charges if you refuse to speak to them, they’ll actually work with you to arrange an affordable repayment plan if you’re up front and honest. You can literally make an agreement to repay as little as £1 a month and as long as you keep up that payment, all charges will stop and it will no longer negatively affect your credit score.
The most important and limiting issue is your credit score. I use an app called Clear Score and it's pretty addictive. Your credit score goes up and down each month and it's easier than you think to manipulate it. All you really have to do to make it go up is pay all your bills on time and keep your credit utilisation low. For example, if you have a credit card limit of £2,000, making sure you pay on time and never exceeding 50% of the limit, so never spending over £1,000 on it, will improve your credit score or keep it high. Also, if you apply for credit and don’t use it, that also improves your credit score.
Regardless of the mess any pandemic spending may have left you in, there's always time to change your habits and make a new start.
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