We are all broke after lockdown because normal life is too expensive

After a year spent on the sofa, a return to the world has come as somewhat of a shock to our bank balances finds Natalie Gil

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After over a year of being barred from many of life’s joys – pub drinks, festivals with friends, dinners at your favourite restaurant – you might be making up for lost time now the world has re-opened. But your bank balance, perhaps initially bolstered by time spent trapped at home and without costs like commuting, has probably seen better days.

Matt Reid, 20, a content creator from Stirling, says his spending has increased significantly since lockdown lifted. Reid has been “making up for lost time” by socialising at the pub and travelling to football away games. “I’ve sort of thrown budgeting out the window,” he says. “While working full time through the pandemic, I didn’t have much time to spend money so now I’m spending a lot and enjoying life while I can.”

After a year spent on the sofa and seeing thousands of memes vowing to never leave the club before lights up again, many of us are feeling gripped by NOMO (no more missing out). But living your best life comes at a cost, and if you’re feeling the pinch financially, you’re not the only one.

Nearly 70 per cent of Gen Z plan to spend more than usual this summer, according to research, with pubs, restaurants and the UK travel industry set to be the biggest beneficiaries. The easing of lockdown restrictions after a hard year, coupled with the buoyant atmosphere of the warmer months, has resulted in many of us treating ourselves more than usual.

For some people this “treat” mentality is in lieu of what they really want - compensation for the things we feel we’ve been deprived. For Sara Patrick, 34, a British mechanic living in Sweden, being unable to travel home to the UK provided the impetus to treat herself to “fancy meals and gadgets” instead. While she and her fiancé are looking to buy a house and recognise the importance of saving right now, when they had vacation time, she says, “we definitely splurged in place of going away.”

For others the bill has spiraled when we’ve become out of touch with how much things cost. Charlie Bonner, 20, a student and barista from Bexhill, has been shocked at the cost of returning to normal life. “I genuinely forgot how expensive things are,” he admits. “In Brighton it’s something like £4.50-£5.50 for a pint of beer. I think I erased that from my memory pre-Covid because of how expensive it is.”

While he’s glad to “be able to go out [rather] than be stuck indoors ordering takeaways and parcels on Amazon,” Bonner says he wants to wait until the world has returned to normal completely before spending money on “exciting things again, like going on holiday”. “I think it’s pointless to do those things while we’re still living in uncertain times.”

I’m far more aware of my finances than I was pre-lockdown

This increase in spending isn’t all necessarily on treat items - some people have invested more in themselves. Arthur L Wood, 26, a poet from Winchester, has been treating himself, but “in healthy ways”. He’s given up alcohol and instead has invested his money in a new gym membership, a vlogging camera and a print run of 250 for his second poetry collection. “I’m far more aware of my finances than I was pre-lockdown,” he says. The “eye-watering” cost of train travel, for instance, has made him question future plans to travel to London.

Others have realised quickly that they need to rein in the spending before it gets out of hand. Faye Dickinson, 28, an influencer and content creator from London, found herself going out for brunches and dinners four to five times a week with different friends when restaurants first re-opened. She also treated herself to a few more designer bags when IRL shopping was put back on the agenda – “as if I needed anymore,” she jokes.

“I do feel the urge to treat myself more than I used to pre-Covid. However, there’s nothing wrong with treating yourself as long as you’re smart about it and make sure your finances are in order,” Dickinson says. She’s since managed to strike a balance between going out and saving money by tracking spending, only eating out on weekends and setting boundaries.

Getting into debt is the biggest risk of overspending this summer, says Bola Sol, finance coach and author of ‘How To Save It’. “We shouldn’t let our emotions drive our financial decisions. Missing someone and spontaneously meeting up with them has a cost. Could we see them next month when we’ve budgeted for that outing? Spending is fine, we just have to do it with intention and clarity of the cost.”

Get comfortable with saying ‘I can’t afford this right now’

Dickinson says that she has been learning how to “get comfortable with saying, ‘I can’t afford this right now,’ ‘That’s not in my budget now,’ or ‘I can’t do that this month, but do you want to fix a date for next month?’ It’s not as hard as it seems. The more you do it, the more you get comfortable with it, and it becomes natural”.

Struggling to do the same? Sol recommends downloading a budgeting app for managing your money if you’re often on the go, such as Yolt, Emma or Squirrel. “Finding a balance on your own can be hard so it’s good to have reminders that let you know when you’ve overspent in certain categories.”

Alternatively, you could create a budget the old fashioned way – in a spreadsheet. A good rule of thumb for budgeting is the famous 50/30/20 rule, which involves allocating 50 per cent of your income on your needs (essential living expenses including your rent/mortgage, bills, food, etcetera), 30 per cent on your wants (the fun stuff, like shopping, drinks and eating out), and the last 20 per cent on savings or clearing debt. “It’s a great way to ensure all areas of your life are accommodated accordingly,” adds Sol.

Saying all this, she advises against being too frugal when there’s so much fun to be had. “People are spending more because they’ve been deprived of outdoor activities for so long.” Events like festivals and going out to eat with loved ones are the biggest are many of our biggest expenses – and that’s okay. “It’s great to save money but ensure it’s not at the cost of missing your life.”