save like you're in lockdownHow are you doing with the lockdown? It’s been 6 weeks for us and I’m starting to unravel a bit. We’re in a good position financially and mentally, but I miss normalcy. I want to go outside without having to worry about getting sick. I miss talking to people without a mask on. This is a strange time to live through. Fortunately, we are weathering this pandemic pretty well financially. My online income and side income are way down, but Mrs. RB40 has a solid job and our passive income is still good. Our spending is down too. I think that’s the silver lining in this lockdown. Many households are running on a bare-bone budget until things are back to normal. This gives you a chance to see how much slack (fat?) you have in your regular monthly spending. Also, economic uncertainties will give many workers the incentive to pursue financial freedom and early retirement. Life is so much better when you don’t have to depend on an employer for financial security. Financial independence isn’t that difficult to achieve if you put your mind to it. Once this is all over, continue to save like you’re in lockdown and you’ll be there before you know it.

Lockdown spending

The first step toward gaining control of your finance is to track your spending. That way you know where the money went. Once you do, it’s easier to trim the fat. We can take a look at our past monthly spending and compare it to our lockdown spending. For many households, their spending is way down because most businesses are closed. This is about as bare-bone as you can get.

For us, our spending didn’t change too much. We already live modestly before this so there isn’t a lot of room for improvement. Let’s go through them. This is the advantage of tracking our expenses. We can go over the record whenever we need to.

Normal Lockdown Note
Housing $1,250 $1,250  

This one is fixed-cost for most families. It includes the mortgage, property tax, insurance, and repair/maintenance.

Transportation $100 $50  

I’m not driving much at all so we don’t need to buy gasoline. It’s just the car insurance while we’re in lockdown.

Groceries $550 $600  

We’re spending about 10% more on food. Everyone is eating more while we’re in lockdown.

Entertainment $200 $50  

This is for eating out and going to events. We usually eat out once/week, but we cut way back. Mrs. RB40 has an immunization issue so we need to minimize any contact.

Kid $100 $0  

Various kid stuff like the soccer club, clothes, birthday. All these are on hold for now.

Health $100 $0  

This is the deduction for doctor and dentist visits. These are on hold too.

Misc $150 $50  

Clothing, minor home repair, and that kind of thing.

Travel $700? $0  

This is the big difference. We usually travel abroad once per year, at least. We can’t go anywhere now. Normally, this category costs about $5,000 to $10,000 per year.

Total $3,150 $2,000

 

Permanent change in spending habit?

It looks like we can save about $1,000 extra per month during the lockdown. I assume most families would have a similar experience. Of course, lockdown is unpleasant, but it’s the perfect time to go over your spending. You can see what really brings you joy and what doesn’t. What are the first few things you will do when the lockdown is over? Those are the things that are really meaningful to you.

For me, I want to go see my parents in Thailand. This is time-sensitive because my mom has dementia. She’s getting worse and I can’t wait too long. Stuff like clothes, home repair, and eating out isn’t a high priority for me. I could do without those things.

Unfortunately, I don’t think the extra savings will continue for us. Once things are back to normal, we’ll go back to traveling and buying clothes and stuff again. Our spending was at a good level already. All these expenses are just deferred until later.

What about you? Are there things you can cut out of your spending without impacting your happiness too much? What is the first thing you’ll spend money on when the lockdown is over?

*Sign up for a free account at Personal Capital to easily track your expenses and net worth. They also have a nice Retirement Planner and Investment Checkup app. It’s a great site for DIY investors.

Image credit: Pablo Padilla

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