While confinement has been a financially tough times for millions of people, with workers on leave, layoffs and job uncertainty – we can see it too registration the amounts of the debt being repaid and a boost in how muchash some people have hidden in savings.
The British have paid an incredible 7.4 billion pounds ($ 10 billion) of credit cards and other consumer debt during the first containment – with figures from Experian showing that people paid an average of £ 2,000 ($ 2,700) each in March, April and May 2020.
While new figures from the Bank of England show that a whopping £ 18.5 billion was deposited into savings accounts in January, almost four times more than the same month in previous years.
Work at home at meant that many people were saving money on commutes, cafes and lunches on the go, while a ban on going out, vacations, concerts, festivals – in fact, just about everything which was fun – all meant a lot of people ended up with extra money at the end of the month.
Others used the foreclosure to take a long, careful look at their finances and see where mistakes were made – and where there was room for improvement.
One of those super savers was James Whitbread, 26, Who managed to erase a staggering £ 17,000 ($ 23,000) in credit card debt during foreclosure.
Bus driver James was able to pick up overtime breach his debt and, less than a year later, completely erased it and now has started saving money every month.
Talk to LADbible he said: “I actually had been in debt since I was 21. I was young and dumb when I got my credit card – I had basically maxed out and paid off for years.
“I never paid the full balance. I got paid weekly and every week I took my direct debits, leaving me around £ 100 and then put the rest in on my credit card and I just thought, ‘when is this going to end?’
“The lockdown was almost a blessing in disguise. It really helped me because it made me realize how much money i waste, not even going out, it really opened my eyes to how much I was spending – eEven things like buying lunches, before the lockdown I was spending £ 10 a day on lunch.“
Realizing he needed to change, in April 2020 James set a goal of being debt free by April of this year – not only was he successful, he even paid it off about six weeks before his targe.
He added: “Due to the fact that other people at work have to protect themselves or isolate themselves, there was a lot of overtime available, which I took full advantage of.
“Last year I was able to pay off a lot more debt and save £ 200 a month – just because I was locked out.
“That’s the only silver lining I can get from the lockdown, because I miss my friends – but it definitely got me on the right path.“
Verena backup companion Hallam also saw his finances improve during the lockdown; She started clearing her £ 13,000 ($ 17,000) of credit card and loan debt in 2013 years old and finally managed to pay her last installment in October 2020.
Verena Paid £ 3,500 ($ 4,800) in just ten months in 2020, almost double what she paid over the whole of 2019.
She said LADbible: “In 2013 I had £ 13,000 in debt. It was credit cards and loans – IIt was a bit of a light bulb moment when I saw it hit £ 13,000 because I hadn’t really cared how much I had. Even just paying the minimum payments meant I had no more disposable income.
“In 2013, I realized I would have to become good budgeting, get really strict and frugal and i did that for years until i started to earn a little more and I could start saving money for an emergency.
“I paid off my last debt in October 2020 and the foreclosure has helped me tremendously to have less things to spend money on in the first place so I was able to put more money aside. quickly.
“There was nothing to spend my money on and I work for myself so I was lucky to be able to find as much work as I wanted.
“Since I paid off the debt, I have was able to put more money in my savings. “
Offering advice to anyone in the same situation, she said: “As soon as I decided to write off my debt, I put together a spreadsheet that I have completed over the years – it has all my expenses, all my bills, all my annual payments, everything.
“When my contracts expired I went around and made sure I got the best deal. I managed to reduce my phone contract to £ 10 a month, got car insurance the cheapest possible and I found a cheaper home internet provider. It saved me hundreds of pounds every year just by not auto-renew.
“I also looked for ways to make more money on top of my regular salary. using cash back sites.
“The most important thing I did was probably use all of the bank change offers – I made £ 900 over a year doing this. They give you £ 100 at a time. It takes about 10 minutes to fill out the form, as long as you have two direct debits that you change. I just did this a few times – had two on the go with two direct debits each and swapped them whenever I got the bonus. “
The pandemic and the lockdowns that followed had a sobering effect on all of us and it gave us a lot of thinking time to assess what is important in our lives. This too has made many people start to think of an emergency fund for the future.
Chip money saving app, which allows its users to automatically save money while allowing depositssaw a huge change in the number of people saving for a “safety net”.
From March 2020 to February 2021, manual savings for chip users increased by an incredible 814% – from £ 118.88 to £ 1,086.24 – while automatic backups increased by 43%.
Since March 2020, tthe number one savings target set by users has been ‘security net’.
Alex Latham, CEO and founder of Chip, says LADbible: “Pre-pandemic, the most common savings goal on the Chip app was’ holidaytime’ – more than 50 percent of people haD as their goal.
“But it was pretty amazing throughout March 2020 we suddenly saw this massive increase in the ‘safety net’ funD – something we had never seen before and it became fa’s first goalr.
“In talking to these users, we found that people realized their jobs might not be as secure as they had been previously thought and they or they worried about how their life was going to unfold over the next few years. The the pandemic made them think: “I need a blanket to fall back on” and Ppeople started saving a lot more aggressively.
“What struck us the most was that these were people who had not thought of have a safety net before the pandemic – tThe average person in the UK takes emergency fund much more seriously following the pandemic.“
In the future, whatever that may look like, Alex believes that this attitude towards saving and the importance of having a financial safety net to rely on will persist.
Last year, when lockdown restrictions were relaxed and Britons were asked to eat out at Help Out, Alex says savings have leveled off – corn compared to previous years people were saving even more.
Alex added: “If anything came out of this pandemic, from a personal finance perspective, it’s that people need a nest egg to fall back on.
“Yes There are a thing we have seen that no job is as secure as we think and that it is important to have an emergency fund. I don’t think that’s going to change.
“I think people are very aware of how much we take normalcy for granted and I think a emergency funds will become a bigger part of British culture than ever before. People will take this idea of a safety net much more seriously. ”