By Jess Commons
If you’re in a position to be able to save money, you’ve probably heard that goal-oriented saving is an effective way to save more in less time.
According to a study by National Savings & Investments, people who saved for a tangible goal would save 35% more than those whose savings were simply ‘general’.
It makes sense: knowing that you’re saving for a wedding, a handbag, a holiday or a house gives you a clear picture in your mind of your desired outcome. If you’re just putting money aside without any specific focus, it’s a lot easier to justify taking out the odd £20 (or more) here and there.
That being said, the pandemic has turned everything upside down and on its head. Some of us have had work dry up completely, while others have had the opportunity to save for the first time. Whatever your situation, it’s likely your saving now looks very different from your saving back in March.
The members of the Money Diary Facebook group are keen aficionados of goal-based saving so we asked them what’s happened to their goals under lockdown. Click through to find out.
“Pre-COVID I was saving for a house deposit and a holiday fund. I’ve managed to put at least an extra £200 a month towards my house deposit. I think it’s mainly due to the money I’ve been saving on petrol as I only have to fill up my car once a month now. Also, I’ve noticed I’m making fewer impulse purchases like takeaway coffees and meal deals, which has really added up. I had £750 saved up to spend on a holiday this summer, but when lockdown was called in March I decided that a better use of that money would be to wipe out my credit card debt.”
“I was starting to save for a house but because I’m self-employed I’ve had to eat through my savings to pay my bills. No goal for when I want to save, I just want to put as much aside as possible.”
“Pre-COVID I was saving for several planned holidays as well as my everyday savings for birthday/Christmas presents and a music festival I go to every year. I did have to dip into those savings a bit as I’ve been furloughed since April, but was also able to save another £170 or so a month because I wasn’t spending money on my monthly travel card, plus money from gig tickets/flights/hostels etc being refunded. That’s being diverted into driving lessons now driving schools are reopening, as not being able to drive is something I’ve found quite restrictive in the last few months. I also got bought out of my previous house and had a small windfall from my gran so that’s all gone into a savings account to put towards buying my own flat once I’m un-furloughed in September.”
“Emergency fund all the way. I got a new, better paying job at the start of lockdown so saved really hard for the first few months to improve my emergency fund then had a pay cut, so still saving but less. I now have a four-month living expenses emergency fund (£5k) so I’m really happy with that, and if I were to lose my job I’m comfortable with living off that. Having the new job helped get me this far for sure but also no commuting costs has helped too.
Having said that, my food bill has gone up so it all evens out. Lockdown and working from home has made me realise how much my living conditions affect my happiness so now also saving to move to a nicer flat. I’ll keep contributing to my emergency fund but the bulk of my savings will go towards moving and long-term future like buying a house, which we’re already saving for.”
“I’m paying down debt, so while I had been paying pre-furlough, I took a three-month break thanks to my building society and started piling the money into my ISA as I was concerned about redundancy and thought I’d need some cash handy. Have saved so much with not going anywhere that I’ll be able to pay off my debt by the end of next month.”
“I’m saving for my now-postponed wedding! I was saving HARD to hit the number we needed by August and since we’ve had to postpone the pressure is off a little, so I’m still saving but not being as brutal with non-essential spends now. A little treat here and there (I’m talking £10–15 on some nice toiletries etc) has definitely made lockdown a little easier.”
“We are still saving for a deposit but I’ve also managed to pay off my overdraft, which I’ve been living in since I was 18. We’re lucky that neither of us has been furloughed so our income has remained the same throughout. I can’t say I’m saving more every month but I’m trying to find a balance and so far, so good.”
“Honestly, it’s been the opposite of what I thought. I work for the NHS and I did stacks of overtime (around an extra 80 hours a month — I was exhausted but we were so understaffed). Thought I would take home a huge pay packet but by the time I’d paid taxes, pension, student loans (ended up paying the next percentage bracket up as well), I only took home an extra £150–200 each month. I was gutted. I still had extra costs though: fuel to commute in each day, having to hot wash my uniform every day, food shops have been more expensive — even not being able to bulk-buy pasta is bumping up my food bills — paying my dog walker more often. I was supposed to be buying a house but my purchase fell through days before we went into lockdown and then my landlord bumped up my rent. It’s all been quite frustrating but I guess I have a slightly bigger house deposit now? But still need to pay all the fees associated with moving again.”
“I was previously saving to buy a flat and go on a trip to NZ for my 30th in December. A pay cut means I won’t be buying a flat any time soon. I also won’t be going to NZ as borders are closed. Instead I’m just saving whatever I can so that I feel secure should something go wrong.”
“Before COVID I’d made a decision to improve my finances generally so I was being mindful about my outgoings. I had managed to save up a small pot but when COVID hit and my job offer got retracted I panicked for a few months and saved almost everything minus bills. I’m in a better position now, job-wise. But if I hadn’t been saving already I wouldn’t have had a fallback, and I’d have been far more stressed.
Before, I was saving to have more money for holidays, now I’m saving to have a fallback in case something happens.”
“I didn’t have the funds to really save. I got my dream job in lockdown. First pay this month and have set up a standing order to take 10% of my wage to my savings account.”
Originally published at https://www.refinery29.com.