Since lockdown I have finally got my finances in order. Blocked from holidays, costly train fares, expensive lunches and post-work drinks my bank balance has never looked better. I’ve cleared the credit card for the first time in a long time) and I’m enjoying building up a little nest egg.
However, as lockdown has lifted my husband has become increasingly keen on spending money again. He’s gone as far as to say it’s our duty to spend to support local shops and businesses. It’s been brilliant not worrying about money but he says if everyone had my attitude the economy would never recover, which would hurt us all in the long term.
I’m worried that spending again at our previous levels would put us in a dangerous position should there be a terrible economic crash around the corner.
What should we do?
The three-month lockdown has had dramatic effects on the finances of the nation. The Government’s spending is on a scale not seen in peacetime. Millions of workers have been furloughed, with the state paying their wages, while businesses both large and small have been forced to seek emergency funding, both from the Treasury and investors.
Many households, however, have emerged better off. A June report from the Resolution Foundation, a think tank, said a “big divide” meant 3.4 million adults were living in households in the top 20pc for income and had seen their budget strengthen. Without the option of spending money commuting, travelling and going to restaurants and bars, but still earning full pay, this group have more money than ever before.
Pensioners too, on inflation-protected state and private pensions, have become wealthier. Those in the lowest paid professions are most likely to have lost their jobs.
The question is – now the economy is reopening, is it the better-offs’ responsibility to spend Britain back to health?
Clearly, that’s what the Government wants. While there has been mixed messaging about face masks and whether you should return to the office or not, Boris Johnson wants you to start splashing your cash again. Many businesses – particularly those that rely on peak summer months – are on the edge of disaster.
The counter argument is that Britons were far to keen to spend money they didn’t have before the crisis. Spending on credit cards, the use of high-interest short-term loans and car financing were seen as societal ills. Savings left were at record lows. Surely this is the shot in the arm our household finance needed?
All that to say: you’re right and your husband’s right. Perhaps you could set yourself a budget, allowing yourself to spend a certain amount of all that money you’ve saved in local shops and businesses but taking care not to build up too much of a credit card statement again.
After all, you’ve been stuck indoors for months and the sun is now shining. Don’t you deserve to enjoy a treat?
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