Saving advice as the economy reopens – ‘Don’t try and keep up with the Joneses’

Savings are being relied upon more than usual at the moment given that coronavirus is continuing to impact the economy. Thankfully, we are starting to see evidence for a slow recovery as lockdown rules are eased and as such, people may soon be able to focus on their regular financial plans.

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One reddit user clearly had this on their mind as they reached out to the community in June to ask for help.

The user detailed that they were in their early 30s and had just become financially independent.

They admitted that they had never been very disciplined with money but were keen to give it a real try.

They had already taken some early steps such as siphoning off a certain amount each month for savings but they detailed that they felt like they could do more but just wasn’t sure where to start.

The post received a number of responses but one user laid out four particularly helpful tips.

User “AnotherKTa” responded with what they thought would be the best place to start: “It’s almost always easier to decrease your outgoings (i.e., spending) than it is to increase the amount of money coming in.”

They went on to list four main tips that could help, with the first concerning something that likely affects many people:

Avoid lifestyle creep

As people move through their careers their likely to see their pay packets increase.

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The temptation will be there to increase spending as income increases but for people trying to save, the indulgences should be resisted: “When your income goes up (such as getting a pay rise), try not to let your spending go up by the same amount.

“Just because you’ve had a £5k pay rise, doesn’t mean you need to go and buy a new car, start eating out every week, go to more expensive restaurants, buy a shiny new tablet, etc. “Lifestyle creep is the main reason you see people earning six figures in London and still being broke at the end of the month.

“If you can get a pay rise and not make any changes to your outgoings, you’ll be saving a lot of money.”

In relation to this, AnotherKTa’s second point concerned a psychological spending habit that people may not even be aware of:

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Don’t try and keep up with the Joneses

It’s hard not to want to keep up with the latest luxuries in the modern world, especially given that we live in a largely consumerist society.

It’s an unfortunate burden that people can feel envy over other people’s possessions but we have the power not to act on that emotion: “You don’t have to spend more money just because other people are.

“The fact that the guy living down the road from you just bought a new Audi (on finance), or everyone in your offices has bought £60 smart water bottles doesn’t mean that you need to. This is closely linked to the previous point.”

For those who simply cannot resist temptation, the next tip offered a way to indulge sensibly:

Avoid impulse purchases

“One common technique here is when you want something non-essential (new tablet, expensive clothing, etc.) to put it on a list, and if you still want it a month later then you can buy it.”

The tips offered thus far can feel restrictive in nature but AnotherKTa’s final piece of advice explored the fact that we should all enjoy life where we can:

Remember that it’s OK to spend money

“Don’t obsess about personal finances, savings and cutting costs to the point that it starts affecting your mental health.

“Saving money is not a goal in and of itself, it is a means to achieve what you want.

“Don’t let saving for the future ruin the best years of your life.”

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