How Covid-19 is changing our money habits
9 ways it’s transformed our spending and finances
Covid-19 has changed the way our children study, it’s changed how and if we work, and it’s certainly changed many of our habits – particularly the amount of box sets many of us are getting through just now.
Here are nine ways it’s transformed our spending and finances:
1. We’re using even less cash
Use of actual physical money was falling even before we were all locked down. Covid-19 has just sped that up.
Now we’re mostly shopping online and when we do go out the retailers have signs up asking if we can pay with card to help stop the coronavirus spread. Even the contactless limit has been increased to £45, to help reduce contact.
Virgin Money data shows the number of ATM withdrawals is down nearly 70 percent post lockdown. Having said that, when we do withdraw cash we clearly want to stock up – the amount we withdraw is actually up 16 percent.
2. We’re wasting less food
Earlier this year the food waste campaign WRAP estimated that the average family with children wasted £700 a year by chucking out food they could have eaten.
That has all changed with the lockdown. A survey carried out by environmental charity Hubbub showed that shoppers are making the most of their “lockdown larders”.
New habits include making smaller meals, throwing away less and even ignoring some best-before labels (NB never ignore use-by dates, those are the ones that should be seen as a real warning).
Cutting food waste would be one good money habit to keep going even after the shops are back to normal.
3. We’re shopping online even more
Saying ‘online shopping is growing’ like it’s a surprise will make this article sound like it was written in 1997.
Unsurprisingly, online shopping is up when most of the actual physical shops are closed. Virgin Money data shows ecommerce transactions have increased by around 10 percent.
That might sound like a relatively small increase, considering, but shopping everywhere else is down substantially.
Physical stores will be struggling with the fallout from the lockdown so if we favour online shopping in the long term, it could become even harder for the high street to recover.
4. Some of us are spending more on alcohol
The pubs and bars may have closed but Brits are finding new ways to share a drink and socialise together, from online pub quizzes with colleagues to Zoom-based wine evenings.
One in five drinkers say they are consuming more alcohol since the lockdown began, according to the organisation Alcohol Change UK.
It’s warned that extra drinking could lead to problematic habits. And, of course, extra spending on alcohol can ramp up household spending at a time when many of us need to cut back.
But it is interesting that many of us are still finding ways to socialise and share a drink without the risks of meeting in person.
5. We’re spending more on baking
We don’t have stats to support this one but, come on, just look at social media. It’s like The Great British Bake Off out there!
From banana bread to sourdough loaves, the UK has the baking bug bad just now. Flour is quite hard to come by in most supermarkets at the moment but those who manage to find some are filling their hours (and stomachs) with home baking.
Perhaps post-coronavirus more of us will be open to cooking from scratch.
6. We are spending a vast amount more on our homes
Maybe it’s because of all the DIY, maybe it’s because we have time to think about our homes, maybe it’s simply because we’re at home so much just now that we want them to be as pleasant as possible.
Data from Virgin Money shows an increase of 84 percent in customers shopping online for home and materials. That’s a huge increase.
7. We’re spending more on health and fitness
Some of us are using the lockdown as a chance to increase our fitness levels.
According to analysis carried out by the Reboot Online Marketing Agency, searches for ‘rent gym equipment’ are up an incredible 3,600 percent in the last 90 days. It also found that searches for ‘yoga online class’ are up 800 percent and ‘home workout’ up 700 percent.
That fits with Virgin Money analysis that shows online spending on wellbeing is up 41 percent.
With gyms and beauticians and hair salons closed, perhaps we’ll all get better at pampering ourselves and working out at home. It will be interesting to see if all the online fitness content leads to a fall in demand for gyms - or if regulars can’t wait to get back.
8. We’re doing more online banking
While most bank branches are still opening during this crisis (albeit with reduced hours in many cases), most people would rather not visit high street branches at this time. Virgin Money saw online banking registrations almost double in the first week of the lockdown, suggesting people were planning to do far more online if possible.
That is back to more normal levels now but it seems likely that the lockdown has increased take-up of online banking and that may well last past the crisis.
9. We’re spending less on commuting
Unsurprisingly, people who are not travelling to work are spending less on commuting.
Clearly that saving won’t last entirely once the lockdown ends and we all get back to a more normal working life. However, many analysts think that this crisis will result in a transformation in how we work, with far more office workers doing at least some days from home.
There could be a long-term saving here and, like so many money saving changes, this one is also good for the planet.
It doesn’t need saying that the coronavirus crisis has changed our lives dramatically and completely.
There are ways, good and bad, that it has also changed our money habits dramatically. Some of these new habits will be temporary, whereas some could last long after a vaccine is finally found.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.