A common theme of the Covid-19 pandemic has been the need to self-isolate if you have tested positive or been in contact with someone who has tested positive. For many this has meant 10 to 14 years stuck at home wondering what to do with their time.
I am here to tell you that it doesn’t need to be a wasted period of time. Being in self-isolation can, and should be, a period of self-reflection and learning. So lets have 5 money arguments to reflect on.
Why do you buy food at work?
As many people have started working from home they have realised that their food bills have gone down by quite a bit. The main reason for this is that buying food at work is more expensive than making it yourself at home. While self-isolating it might be a good idea to start reviewing your spending on food.
The best and easiest way to do that is to get hold of a few months of bank statements, usually available in your online banking, and start going through them. Either on paper or on a spread sheet make a note of every time you have bought food while working. That £3.50 meal deal might sound like a good deal, but if you buy that Monday – Friday it will cost you £17.50 per week!
It is by far more cost effective to buy food from the shop and prepare your lunches at home. Also, the food you end up eating is often nicer and more nutritious.
Why do I act on impulse all the time?
A lot of common unnecessary spending occurs as a result of an impulse decision. It could be at the supermarket doing your weekly shop and suddenly you reach the check out area and you have bought loads of snacks that you didn’t need. Or, and I am guilty of this, I can’t be bothered to cook tonight – lets see what is on Uber Eats.
According to an article by Big Hospitality, the average person spends £451 per year on takeaway food. I challenge you to have a look back over the last 12 months to see how much you have spent on takeaway food, it might horrify you.
Now I’m not going to come out and say you’re not allowed any takeaways, but lets limit it to 1 per month. That way it becomes a treat that is a lot more financially manageable. You could save a lot of money.
Why do I have so many direct debits on my account?
Do you spend a lot of money on subscriptions that you don’t even use? Well you are not alone in this. An article by This is Money details how Britons waste £25 billion a year on subscriptions they don’t even use. Remember when you bought that gym membership a year ago but only went about 3 times. It turns out that 12% of people surveyed said that they pay for a gym membership that they don’t use.
On average the typical adult spends £496 on regular payments each month, but £39 is wasted on unused direct debits, standing orders or recurring card payments, according to NatWest.
So lets have a look through our bank statements and our standing orders / direct debts on our online banking. You might find that you are paying for something you don’t even use.
Why are my utility bills so high?
Even more so now if you are working from home, you need to keep an eye on your utility bills. Check that you are on the cheapest tariff available with your current gas and electric supplier. If you have recently completed a fixed term deal but you didn’t do anything, chances are that you will be on your supplier’s default tariff which is also their most expensive one. If you are already on the cheapest tariff, shop around on price comparison websites at other suppliers; you could save £100s.
Think about the way you use energy in your home. Do you leave appliances on standby or plugged in with the switch on? If this is the case, you are still using energy even if you think the appliance is off. Either unplug or turn the plug off when you are not using something.
Also think about your light bulbs. If you still have incandescent light bulbs, please just get rid of them now. Halogen light bulbs used to be the go to if you wanted to save energy on lighting, but they have quickly been surpassed by LED bulbs. LEDs last over 10 times longer and will use up to 85% less energy. Depending on the size of your house, you could save up to £300 per year just by switching to LED bulbs.
Why am I not investing?
Did you know that only 2.2 million Brits take advantage of the ISA allowances by having a stocks & shares ISA? This is a shockingly low number. As a nation we need to become more financially literate and invest more. You can invest in a range of things to give a positive return on your money and effort.
To start with, you need to invest in yourself. Being in self-isolation means you now have a lot of free time to do some courses that could enhance your knowledge and give you more skills. Head over to Reed courses and look for something that you are interested in or could apply to your work life. I have completed accredited courses at a 90%+ discount which have directly impacted work.
Once you have invested in gaining the correct knowledge, then I would open a stocks & shares ISA. This is one of the most tax efficient ways to invest in the UK. You can start from as little as £1 and contribute as much as you like up to the ISA limit. You could use the money you saved by looking at the above sections to invest.
None of the content in this article should be considered financial advice, I am not a financial adviser and you should always do your own research prior to investing. These are my opinions only.