In her last piece, LESLEY GREGORY explained how those who are financially stretched in the current crisis can help to relieve their money worries by being more thrifty.
But, according to a UK poll conducted by money-saving expert Martin Lewis, many of us don’t particularly need to be thrifty. More than 60% of respondents said they will be either better off or at least not worse off when the lockdown ends than when it started:
Todays Twitter Poll: Will you be better or worse off by the end of lock down than at the start?
This will seem a perverse Q to the sadly too many in financial dire straits.Yet for some still working, staying at home, less spending means more saving. I want to understand the split
— Martin Lewis (@MartinSLewis) April 8, 2020
There is a paradox of economics called the paradox of thrift. The paradox states that an increase in personal thrift leads to a decrease in aggregate demand and thus a decrease in gross output. That in turn results in less prosperity for everyone.
So, for those who aren’t financially disadvantaged by the crisis, what can you do to support business? How can you help to pull the economy out of recession? Lesley has these simple suggestions.
Our household is OK. We cleared the mortgage recently, we have an emergency fund of cash savings, and our work is secure — for now anyway.
So we’ve been asking ourselves how we can support those around us who may not be so fortunate during this COVID outbreak.
This is our plan
Our plan is to keep spending on the things we’ve always spent money on, even if that’s in an alternative way. So, for instance, if we used to spend £100 a month eating out we will now spend £100 a month on delivered food to support local restaurants. If we used to spend £30 a month at the movies, we’ll buy £30 worth of cinema gift cards for later use.
We’re also aware that some of our expenses — like public transport and buying lunch in the city — are much reduced, so we can divert this money to other uses that may help someone else.
Here are some ideas we came up with to help keep the economy ticking over and support local businesses. I hope it triggers even more ideas.
Yes, we’re being a little more careful with our spending. But we’re still shopping (online) for household items, computer equipment, books, music… If it’s a “need”, it gets the tick. If it’s a “want”, we think about it more carefully but factor in the support for a business.
Have food delivered
Restaurants and cafes are closing due to the COVID outbreak but many are continuing to provide delivery services (or starting them up, if they haven’t before). Our family will be having a meal delivered once a week to support our local restaurants.
Buy a gift card
Our local cinema has closed for now. It’s an independent movie house with a great following in the local community. We’re buying their gift cards to use later when they re-open. They need the money now if they’re to keep paying core staff. A proprietor told me gift cards are “like interest-free loans” for businesses.
This comes from the music industry, where bands usually make more money from T-shirt and other merchandise sales than they do from costly gigs or stingy music streaming platforms. Support a band, an artist, a community group or a charity by picking up some “merch”.
Decline a refund
I had pre-purchased tickets for the local Writers’ Festival and for an upcoming film festival. They sent me a refund — but I sent it right back in the form of a donation. These organisations had already spent serious money setting up their events. Their insurance will help, but not completely.
My Facebook feed is flooded with pleas from local and national non-profit organisations who are struggling to meet the growing need for their services at a time when donations are declining. Some had to cancel fundraising events. Please give.
Share the burden
You may have paid someone to clean your house once a week. Could you share the burden by paying them to “stay at home”, even if it’s less than the usual amount? Perhaps give them a gift card now, rather than at Christmas.
Bring it forward
If you’re like me, Christmas shopping is usually a last-minute rush. This year I’m going to have a big chunk of my Christmas gift purchases done by July, so businesses receive the revenue now, when they really need it.
Every household will have to assess the degree to which they need to bunker down, knowing that personal circumstances can change too. We’re also aware that not every business will make it through, and pre-purchases may not be fulfilled – but that’s something we’re prepared to risk. Think about what you can sensibly do to keep the wheels spinning in your local economy, helping to keep businesses afloat and people in work.
LESLEY GREGORY is an experienced personal finance and consumer journalist. If you’re interested in more of her personal finance tips, here are some more of her most recent articles:
How to cut your spending in the crisis
How to avoid excessive funeral costs
What you need to know about comparison sites
Why you should sell your second car
Who do loyalty schemes reward? Not who you think
What’s in the back of your financial cupboard?