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Eoin McGee: Survive without takeaway coffee during the lockdown? Here's what we can learn from that and other broken spending habits

Financial planner Eoin McGee has some advice on how to approach your finances as we emerge from lockdown.

Eoin McGee

DAVID MCWILLIAMS CALLED it the lock-in instead of the lockdown recently. He felt lock-in had a more positive vibe to it, and I agree.

The past few months have been tough going, and who knows, this virus might come back yet in this dreaded second wave we keep hearing about, but what did we learn from this time financially and what can we do differently with our money if we get another lock-in?

I don’t want to be insensitive to the people who lost a loved one as a result of Covid-19 so it is important to say right from the outset that when you lose somebody everything else is put in perspective and we realise money actually is not important at all.

What the past few months have done is provide us with is a chance to look at our lives, how we live them, how we spend what we earn and how we earn what we spend. We can learn from what we have been through. We were in our homes for a period that you would never have envisaged, shops, restaurants and pubs were all closed and guess what – we survived it.

The lessons

There are two major things we can learn from, the first is that we really missed some stuff and the second is that there is stuff we did not miss at all. We missed meals out, the GAA, pints with the lads, drinks with the girls. We missed wandering around shops finding the perfect item of clothing. We missed the buzz of busy streets and coffee. Lots of people missed good coffee.

For some people, and it took a while for it to happen, as we stripped back all the material things, we realised that the things we were missing most weren’t actually material but it was people and experiences. We missed our friends and family and we doing things with them more than anything.

I find this a lot with private clients; these are the people who are doing really well financially. When they have all their basic needs met and they have enough money to do anything they want, what they want is time with family and friends, doing things with them.

Material things take on less significance when you can have anything you want.

Before life takes over again and we get caught up in all the distractions, you really need to think about the things you pay for that were taken away from you during the lock-in and decide now that you want to keep them in your life.

If you really craved nice meals out with your partner, then from now on have that as part of your priority spending. But be more conscious about it. Plan it, enjoy it and remember it.

Research suggests that when we plan something in advance, we get more joy from it than we do if we just do it spur of the moment. Be conscious about your spending and be deliberate and planned about how you enjoy the money you work hard to get.

Living without is not losing out

But the opposite is also the case. What stuff did you find you always spent money in the past but when it was taken away from you, you actually didn’t miss it at all. Really think about it, is there stuff that when it was taken away from you that you just did not notice or care?

Coffee is the easiest one for me to go to, financial planners always do, but one of the stats quoted to me most from my book “How to be good with money” is the one about coffee.

In the book, I do the maths for the average coffee drinker who pays tax at the higher rate. They spend about €3,000 per annum of their before-tax income on coffee. That is a lot.

If you had to pay for your coffee in advance every year, would you? If your boss said to you that you have a choice “coffee for a year or a €3,000 pay rise” which would choose?

More importantly, for the most part, you couldn’t buy coffee from the coffee shops during the lock-in, did you miss it? Or did you get accustomed to the home-brewed coffee? Was the alternative meeting the needs and wants in the same way the old coffee was? If you are now happy with your own coffee, do not let the old habit slip back into your life.

Look at the details

Of course, think beyond coffee – what other stuff in your life do you spend money on that you just didn’t miss? Realistically, you probably had more TV time than ever before during the lock-in. Did you use all your subscriptions, or did you find one was enough? Get rid of the ones you didn’t use because you now know you never will.

The lesson here is that we need to welcome the stuff we missed and we value back into our lives, but in order to make those things even better, to enjoy them more often, then we need to cut out the stuff that is not adding to our lives.

Be conscious about all this and you will find you are using your hard-earned money on the things that are important to you. That is what financial planning is all about – it is not about cutting your spending, it is about using your money to support the life you want to have.

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Eoin McGee is a financial planner and MD of Prosperous Financial. He also presents the RTÉ One series ‘How To Be Good With Money’, which is currently casting for a new eight-part series. Filming begins in August. To take part, call 01 7088191 or email money@indiepics.ie for an application form.

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Eoin McGee

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