How to cope with anxiety about spending money now the world is open again

After a year of sitting inside and barely doing anything, socialising is back on the agenda – and it is a shock to the system.

Not only is seeing being people and making plans a drain on our social batteries, it is also battering our bank accounts.

Yes, we are really happy to have some fun and normality back in our lives – but we had also forgotten just how expensive outside is.

Bottomless brunch, beer gardens, boujie dinners, Prosecco in the park – plus the cute outfits to do all of that in – it all adds up.

And the triple whammy of lockdown restrictions easing, a bank holiday and a heatwave, is enough to make us feel exceedingly anxious about our finances again.

And after a year of boredom and anxiety, now does not feel like the right time to zip up the purse strings and me sensible. Everyone wants to have fun this summer – you can feel it in the air.

So, how do you do that without getting yourself into financial difficulty, or causing yourself serious money anxiety?

How to budget after lockdown ends

‘Firstly, if you’ve been saving far more than usual over lockdown and you’re panicking about spending, remember that we’ve not been living under normal circumstances,’ says Ellie Austin-Williams, financial coach and founder at This Girl Talks Money.

‘The rate of saving over lockdown, for those who have been fortunate to escape any financial impact, has been abnormally high, with limited opportunities to spend on social activities. Keep in mind that it’s not healthy to be stuck inside without social interaction for a year, so set some realistic expectations of how much you can save whilst maintaining a social life.’

Ellie says you should cut yourself some slack if April and May have blown your usual budget; but use now as the time to pause and refocus your money.

‘Set aside ten minutes to review your finances and set yourself a new budget going forward,’ Ellie suggests. ‘Start by working out what you can afford to spend each month on socialising and spontaneous purchases once you have met all of your financial obligations. ‘

To help manage your finances, Ellie says you should split out your money in to separate pots when you get paid, to keep you on track.

‘Set aside your expenses and put any savings out of sight to avoid any temptation to dip into them,’ she adds.

‘If you’re finding it hard to stick to your monthly budget with social plans constantly popping up, try budgeting your money on a weekly basis. This can help manage your spending more closely and avoid finding yourself hitting zero a fortnight before payday.’

Post-lockdown budgeting tips

Create a budget and start waterfalling your cash. 

Work out exactly what you need to pay all of your essential bills. Put that money into a separate bank account and don’t touch it. Call it The Essentials. That bank account is only for essential spends that you must cover – mortgage, insurance, car etc… these are your personal fixed costs that you can’t miss.

Set up a second bank account for ‘The Fundamentals’.

Groceries, toiletries, your takeaway coffees and takeaway meals. These are costs where your could make cost saving choices say choosing Lidl over Tesco, Tesco over Waitrose etc… can you save costs here to go into pot number 3?

These are must-haves but you can make better choices over how much this is going to cost you. By eating in instead of taking out. By making a coffee at home instead of buying a coffee while you’re are out.  

Set up a third bank account for ‘The Fun Stuff.’

Going out, clothes, holidays, entertaining. And save into it weekly. It you can save costs with The Essentials and The Fundamentals – you can put more in your Fun Stuff Pot.

Lisa Dickson, Founder Caseron Cloud Accounting Ltd

What to do if you find yourself in post-lockdown debt

‘If you’ve found yourself with a credit card bill that you can’t pay off, it can be tempting to panic,’ says Ellie. ‘Try to stay calm and firstly, work out what you owe and to who.’

Obviously, being in debt can can feel really daunting, but Ellie says facing up to your finances and looking at how much you owe will help you with a plan of action.

‘If you owe money to multiple lenders, work out an order of priority for paying off the debt and start by tackling the balances one by one,’ she says.

‘Remove any temptation to spend more money, whether that means getting rid of your credit card, unsubscribing from marketing emails, or pressing pause on the expensive social plans in your diary.’

Next, she suggests reviewing your budget and working out how much you can allocate towards reducing any debt you’ve built up over the coming months.

‘Go through your expenses and look for areas where you might be able to reduce spending by cancelling any unused payments or negotiating bills,’ says Ellie.

‘You can also look for ways to increase the amount of cash you can contribute towards the debt through spring cleaning your house and selling any unused items online.’

Lisa Dickson, the founder of Caseron Cloud Accounting Ltd suggests that you talk directly to your creditors and work out budgets for repayment.

‘Waterfall your personal expenses and move some of your savings into a debt repayment account,’ she says. 

‘Perhaps you need to do something drastic for a year – don’t eat out or buy alcohol for a year – turn it into a personal health goal so your debt repayment has more personal purpose than simply repaying a debt. 

‘Hold yourself accountable and set weekly targets for how much to repay. Perhaps just for one year you might need to take a second job to accelerate your debt repayment and work to a budget.’

This sounds tough, but Lisa is certain you can still have fun even on a strict budget.

‘Lockdown has taught us a huge amount about how to entertain ourselves without going out,’ she says.

‘Walks, picnics, zoom meet ups, barbecues. We can have enormous amounts of fun and social gauge meant without spending a fortune. You just need to be a little creative.’

What to do if you’re struggling with money anxiety

Money worries can be seriously debilitating. The best thing to do is to seek help early and talk to people about how you’re feeling.

‘Don’t try to deal with financial stress alone,’ says Ellie. ‘It might feel daunting to open up about money, but talking about your financial situation and sharing your concerns with a partner, friend or family can help you to manage the stress and work out an objective plan.

‘If you feel pressure to spend from your friends, open up about your financial situation and try to suggest cheaper social plans – more often than not, friends will happily adjust plans to accommodate you.

‘Remember that if you are finding it extremely hard to deal with financial worries and your mental health is suffering, contact your lender or speak to a debt charity, such as StepChange, which can provide debt counselling and support.’

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