While the return to ‘normal’ life is still a while off, we’re starting to see a speck of light at the end of the COVID tunnel with restrictions beginning to ease in states across the country.
It goes without saying, we miss our ‘non-essential’ way of living. We’re dying for an atmospheric pub lunch with one too many pints, longing for our local cafe’s exorbitant smashed avo with bacon and our mouths are watering for a $22 cocktail amidst a bustling bar. Our desperation for ‘normal’ life is real and there's no doubt it will have us back on the non-essential spending scene, with a vengeance.
While we’re no money experts, we’re sensing that launching into ‘revenge spending’ probably isn’t the best approach, so we spoke to finance guru, Tom Christopolous at Delphi Bank to help us out with some hot tips to keep us thriving post COVID-19.
Set A Limit On Non-Essential Spending
We all know how tempting it is going to be to indulge in boujee work lunches, lash out on a luxe ‘going out’ outfit and up your beauty regime as you galavant around town for the first time in what feels like forever. But, we’re here to tell you it’s important to keep a lid on things and keep your spending in perspective.
As a general rule, Christopolous recommends allocating 50 per cent of your income on needs and essential expenses, 30 per cent on wants, 5 per cent for emergencies, and 15 per cent on your all-important five-year goal. “Set up your smaller savings goal (the 5 per cent) as an automatic monthly transfer from your everyday account to your savings, so you’re prepared for an emergency and don’t have to use your hard-earned savings. If you can cut down the first two and increase your savings, then more power to you. Keep challenging the general rule, think outside the square,” he says.
As the temptation of non-essential spending slowly begins to creep up on us, Christopolous suggests having a solid plan in place. “When you are shopping for essentials, never go without a plan. Grocery and home shopping are inevitable. Know what your shopping budget is,” Christopolous says. “Having a focus will prevent you from aimlessly wandering the aisles and talking yourself into getting something you may not really need.”
Try To Save On The Small Stuff
There’s no denying that many Australians have felt the brunt of COVID-19, with many losing their jobs or partially losing wages. It can be disheartening to try and get back into the swing of things, but if we’ve learnt anything in life it’s that you’ve got to try and get back on that horse. Christopolous recommends focusing on small wins to start feeling positive again and regaining a feeling of control.
“Learn to say 'no' by deciding on your 'yes'. The clearer you are about what you want to do in the short and long term, the easier it is to make spending choices that you’ll be happy with when you look back at them. Simply make a start—as the Greek’s say, ‘Bean by bean the sack gets full’.”
So whether it’s choosing to pamper yourself at the hairdressers once less per year or cutting out your biweekly smoothie habit, noticing the small savings will help you get on a roll and feel less tempted to blow $22 on a negroni you've learnt how to nail at home.
Try To Find Your Spending Zen
We get it, saving kind of sucks. There’s plenty of long-term benefits but in the moment, it’s hard to feel happy about being your very own 'fun police'. This is why it’s important to find balance. No one likes the penny pincher who insists on splitting the bill individually for the sake of a few bucks, so try to find your happy medium.
“When you have an exciting goal to work towards, the day-to-day sacrifices don’t seem as bad. First, understand what you need to get by every month (you can use an online budget calculator) – these are your ‘expenses’ and make sure to include the ‘fun’ things as part of your expenses too," Christopolous explains.
“If going out for dinner once a week will keep you sane and happy, consider it an expense. Just budget for it so you know how much you can spend (and save) while you're doing it.”
The world is going to be a fun and exciting place to be after COVID-19 is done and dusted, and we’re pretty sure you’re going to want to enjoy it. Hit up that restaurant you’ve been dreaming about every night in isolation or buy those new sneakers you’ve been eyeing off for months. Find your spending zen and enjoy life while staying on track towards your goal.
Set Small Goals To Get To The Big Goals
If the word ‘goal’ makes you shudder, trust us, it’s not all bad. Whether you like to admit it or not, savings goals are needed in life to achieve and obtain the things we want. We’re sure you’re already dreaming about your next overseas trip and you’re probably hoping not to pay rent for the rest of your life, which means you need to set some manageable goals to help get you where you want to go.
“Set yourself achievement goals along the way and reward yourself when you reach them. For example, if you’re saving for your first home, your achievement goal might be ‘When I save my first $5,000 towards my home, I will reward myself with a weekend getaway.
“The thrill of purchasing things fades quickly, but the joy and memories of experiences from epic adventures to minute encounters can last a lifetime," Christopolous assures.
It’s important to frame your thinking around saving from being something negative and draining, to something exciting and full of opportunity. Christopolous encourages people to see spending and saving as investments in themselves. “Investing in yourself also makes it easier to justify the spend toward your achievement reward. Turn travel into a development opportunity that will increase your income potential, while at the same time enjoying another culture and memorable experience.”
So, when the time comes for our lives to somewhat return to normal and you’re tempted to overindulge and overspend on life’s many non-essentials, just remember you have plenty of time to make up for those months lost in isolation—plus, you’ll come out the other end feeling better for it.
Image credit: Nate Johnston