How are so many people still spending as normal?

[nc1962]

I'm so confused by what I'm hearing compared to how people seem to be living their lives.

On the one hand, it's everywhere about job losses, redundancies, people not being able to pay mortgages. But on the other - a lot of people I know/vague acquaintances are going on holiday at every opportunity, buying a lot of stuff and spending a lot of money on house renovations.

Our household has been hit badly by all of this, with a massive drop in income.

Of course it's different for everyone and up to people how they spend, but I'm so uncertain what to think. Are there really so many households (normal as opposed to very rich) who have been able to carry on as normal? I thought we were very typical in terms of having taken a big hit, but now I don't know what to think and whether this is a short term or long term thing.

I wanted to ask what others are finding to be the case - are a lot of people you know carrying on as normal, or has there been a big financial impact?

I'm spending as normal, I work for the NHS so my job is rock solid and my husband is self employed in a job providing a service that people will always need and is COVID-secure. I'm still skint but that's cause I always am, not because of COVID

It's quite striking the different experiences:

We've managed to save absolute thousands in such a short space of time.

Versus

We’re screwed.... Our carefully planned retirement is now looking quite bleak.

@WearyandBleary

Saved loads due to not eating out, no weekends away, no theatres, no petrol (for commute). We are finding we have about 1k a month more. It’s shocking really if you multiply that up by the whole economy, you can see why it’s ground to a halt.

Same here. We both work in the public sector and have been mostly WFH with no worries about losing our jobs. The money we've saved since March - no commuting, no lunches / meals / coffees out, no holidays or days out have paid for my daughter's university accommodation for the whole of her first year with some left over. It's made things a lot easier for us; it might have been a struggle otherwise.

@nc1962 it is certainly true that where (geographically) people spend money has changed, I'm not sure that's entirely a bad thing though. Our local parade of shops and take aways is booming, including, fe, our local butcher who was warning last January that he'd have to close if business didnt improve. In contrast, a lot of city centre cafes and restaurants are in trouble.

It may be that this pandemic breathes new life into the little suburban businesses that have been quietly shutting for years.

• We're still spending because, put bluntly, we can afford to. Our income is unaffected. We also want to try and do what we can to safeguard other people's jobs, which involves spending money, so that might mean saying yes to more things than we did pre covid. Because if I want businesses and amenities to survive I need to support them.

What we have changed is we've spent on different things. Made a specific effort to use local retailers not supermarkets, gone on days out to outdoor not indoor places etc. So the habits have changed but the amounts aren't that different.*

This is us. We work in a very stable area of property (pretty much the only stable area) but have moved to WFH so no commuting costs, no lunches out, morning coffee, etc. Kids' activities were all cancelled, less petrol being used, and throughout the summer we didn't have childcare costs. We're trying to spend specifically with smaller, local companies, rather than the big multinationals.

We’re fortunate in that income has increased overall. But where I spend and on what has changed.

DH’s work has gone through the roof (architect/build) and they can’t keep up with enquiries as so many people want extensions/ remodels.

This time last year I did the bulk of my shopping at the supermarket with a smaller proportion at the butcher/baker/fishmonger.

I’m now trying to do all my food shopping from independents/markets. I’ve got more time as WFH and since we’re not eating out the overall spend on food remains the same.

Not spending on holidays has made a huge impact on expenditure m. Ordinarily we’d have skied twice had a big summer holiday and two smaller half term breaks. Christmas will also be lower key.

Same storm, different boats.

Still working full time - I'm in school, partner officially worked from home anyway, but used to go to London a lot. We've managed to save lots of money. No commute, no eating out, no holidays, much less 'social petrol'. We've changed our charity direct debits accordingly - to local foodbank, refuge etc - and are buying local and from small businesses rather than the biggies.

Like you say it depends completely on the individual situation. Our household income hasn't changed and there is no suggestion of job insecurity or pay cuts. On the other hand a lot of our usual outgoings have stopped/reduced: previously we ate out now it's a takeaway, the kids after school clubs ended and we don't feel 'safe' to restart them yet. We usually visit friends/family regularly staying in hotels and spending money on petrol - we've stopped this for now. Also no foreign holidays this year.

Income stayed the same, outgoings reduced = masses of savings. We could easily afford fancy holidays or a new car or renovations atm, and while I know some people are really struggling we certainly aren't the only ones who definitely aren't. (I've doubled our monthly donation to the food bank btw, since the start of lockdown, just saying because I know all the above makes me sound a bit awful)

Our household is amazingly better off. Dh is a paramedic and I'm a teacher and we have both been promoted during this. However we know this is not the case and we are trying to do a majority of our spending in small local businesses to support our local community

No childcare since both of us are at home (it's shit and I wish we weren't), no commuting costs - minimal petrol for the car and I'm not buying train season tickets anymore, and my course has just got the reinstated health profession training allowances. Kids' activities have been stopped and are only just restarting, or have folded completely (their amazing dancing teacher gave up teaching).

And I'm at home, bored, isolated, doing online lectures, and shit just falls into my shopping cart as a result.

Yes financially we're better off - but I'd give that up in a heartbeat to go back to where we were end of last year.

No extra savings here! DP works as normal, I wfh but only used public transport before, so it’s not a massive saving in that respect. We took a couple of breaks within the UK and went to see my parents who live abroad, so money was still spent on flights, meals out etc. DC is into football, all his clubs have reopened. We were never massively into going out, we still get takeaways. So yeah, still spending! But trying to keep it local, as much as possible.

I'm intrigued by the childcare costs, aside from when everything was closed earlier in the year, are people still WFH with children?

I was made redundant during lockdown. My previous role workplace was home. In reality I spent most days on the road visiting clients & even if in one of our offices, I could claim all my fuel costs from the minute I left home. I spent a fortune on coffee and snacks though!
I was fortunate to get a new role on the same salary however this is a 120 mile round trip & my place of work is the office so fuel costs to work are at my expense. I am slightly worse off but now I drink the office coffee for free!! As there is less to do socially I am still winning. I hope when things become old normal, I will be back on the road, expensing fuel costs!

Reading these posts wish our outgoings had dramatically decreased! We are fortunate that our income is unaffected but our commuting costs were low and always took packed lunches etc so havent saved much by WFH what we have saved seems to have gone on increased cost of groceries and are helping one DD through uni and paying for driving lessons for another so no savings here and we are spending more but not on treats or luxuries

Both myself and dp have worked throughout covid.
Infact our income increased. I set up a business that I do as well as my job, and its being doing great, and dp had a pay rise. I know we are some of the very fortunate ones.
But our increased income does mean our spending has increased.

I wonder how strongly people prioritised job security before the pandemic and whether we will see a lot of people retraining and young people's career preferences changing. Although there is obviously a degree of luck to my fortunate circumstances, one of the main reasons I chose my job over another offer I had was because of the better job security although I was imagining a recession rather than pandemic.

@Bambooble

I'm intrigued by the childcare costs, aside from when everything was closed earlier in the year, are people still WFH with children?

I have lots of colleagues with school age children aged (say) 7+ who pop out to pick them up from school and then return to work (working later than usual) while the children amuse themselves. Granted my employer is quite flexible but in some cases cases this is unavoidable (after school clubs no longer running/school buses not functioning) so I guess it is in the interest of lots of employers to facilitate this.

Over 5 million people in the U.K. work in the public sector. Their incomes haven’t changed. On top of that, about 20% of the UK’s population are pensioners. Granted, many of those will be on low incomes but not all of them are and they will still be getting the same amount of pension.

I got made redundant but I got a new job which pays over £10K a year more. I got a new (old) car which I need for work. Where I live there seems to be every 2nd house that has bought not just a new car but more cars ie not getting rid of the ones they had and there are tons of people moving house as well. I’m quite surprised tbh

We've been able to spend a few £k on the house due to saving on commuting and eating out etc. We've been having a weekly takeaway but been spending a lot less in general as DH's work still as normal but our outgoings been much less.

Our income has taken a huge hit this year as I was without income for several months this year and DH was furloughed on his already low income. However (and very fortunately) we had savings so used the time off to improve our house. Also we booked a holiday in 2019 and it's been postponed until next year so it may look like we have lots of cash but really our income has taken a huge drop.

@PattyPan

I wonder how strongly people prioritised job security before the pandemic and whether we will see a lot of people retraining and young people's career preferences changing. Although there is obviously a degree of luck to my fortunate circumstances, one of the main reasons I chose my job over another offer I had was because of the better job security although I was imagining a recession rather than pandemic.

You can never tell though I would never have believed I would be made redundant. My sector is strong and I got offered 2 jobs right away after my redundancy but the business I was in had a specific disaster basically so it meant redundancies. I was so shocked :(

Sorry @PattyPan didn’t mean that to be all doom and gloom I was just talking about my work and the shock of it all, sure yours will be grand

Work busier than ever, more hrs, not saved any extra..............still travel to pay for, yes have treated myself to a couple of things.

@PattyPan - it isn't necessarily about job security, because entire industries shutting for ages is unusual, some jobs lost would have looked perfectly secure last year. Many people may have chosen a career based on resilience rather than direct role security; by resilience I mean the ability to quickly find another role; some of those people have also been affected. So if you work in the arts perhaps also having experience in hospitality, but now both industries closed for a long time so people who had failover plans just lost them. If you work in IT, engineering or science and a specific company got affected because of general sales decline, then you could switch industry/ specialism, but unless you built resilience into your CV over many years you'd probably need to go down a level and take a pay cut; still doing better than many because you can get a job, but probably not happy.