Lockdown 3.0: Why You’re Spending Too Much Even When You’re Stuck At Home
While the lockdown has helped many Britons focus on saving more, this has also led to overspending online for many households. This is the direct result of isolation and boredom for many, who have turned to spending to occupy their time.
According to the global financial institution ING, staying at home can either save you money or cost you dearly, depending on the choices you make.
Consumer behavior has changed dramatically over the past year, as have spending habits. Research and analysis by IFS (Institute of Fiscal Studies) has shown that many households have been forced to spend less due to financial problems, but overspending is still on the rise in a few key areas.
Where and how the British are spending too much during the lockdown
IFS research has identified two main categories in which Britons are overspending during the lockdown.
Perhaps unsurprisingly, the British are spend more on groceries and less on take-out. Food spending is higher than a year ago as many households cook more now that restaurants are closed.
There was an overall shift from in-store shopping to online shopping during the lockdown. This held true even when stores briefly reopened before a new lockdown took effect.
With fewer stores open and commuting more difficult, online shopping for commons (the kind people typically get in stores in person) has increased by almost 25%.
Shopping for fun
With more time spent at home and fewer places to visit, it’s no surprise that people are overspending online. According to Live Business, a number of online businesses saw a significant increase in sales in 2020.
For example, Amazon sales rose 26% to £ 13.73 billion during the lockdown restrictions. Furniture retailer Dunelm has seen online sales double during the lockdown, and the LEGO website has received more than 100 million website visitors in the first six months of 2020 – double what they expect. usually see.
How to reduce unnecessary purchases
To cut down on overspending, look for ways to cut unnecessary spending from your budget.
Find more ways to have fun online
Shopping isn’t the only way to have virtual fun. You can find all kinds of concerts, music and film festivals, streaming shows, online classes and workshops, as well as virtual tours of museums and galleries to keep you entertained without spending too much.
Sites like VisitLondon offer plenty of ideas, but you should also check your favorite haunts to see if they have any virtual events.
Track your spending online for a week
Whenever you spend money online, write down how much you spent, the time of day, and how you felt. At the end of the week, analyze your habits.
Shopping out of boredom for things you don’t really need? Are you saving money by shopping online? If you’re overspending buying things that are mostly wants rather than needs, it’s time to cut back.
Set a savings goal
Having a reason NOT to spend might help curb the urge. So if you dream of an exotic vacation after the pandemic is over, or if you want to renovate your home or buy a new car, start saving now.
Write down how much money you need to reach your goal and display that number where you can easily see it. Whenever you beat the urge to spend, transfer money to your savings account as a reward.
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